- TCS
- HDFC Bank
- HUL
- Asian Paints
- Ultratech Cement
Honorable mentions : Bajaj Finance, Nestle, MRF, Infosys, Kotak Mahindra Bank, ITC, Bajaj Finserv among others.
Kindly note you need no disclaimer to warn people with regards to the above stocks. If you can invest in the above stocks and can hold on for a decade you are going to make considerable wealth.
Now looking at the diverse nature of the above portfolio. The top 5 stocks which are taken are chosen from IT, Financial Services, FMCG, Paints and Cement Sector. Therefore, covering most of the major sectors of the Indian economy.
By putting your money on these stocks you are investing in the growth story of India. Now one more very crucial thing which is definitely going to help new people.
So what is the difference between professionals and new people?
How can you quickly learn and become a professional?
See, please try to understand the mentality of a new person entering the market. Say if a person enters the market with Rs 100000. He will right away aim to double his money quickly. This idea looks lucrative but easily backfires.
Now see what a professional will do. When a professional will enter the market with Rs 100000 he will aim at capital conservation first. He will first aim to ensure that he does not lose his money in the market.
So that is what the difference is. The person who is a professional will invest all his money, say he has Rs 100000 with him equally in the above mentioned 5 stocks and peacefully wait for a decade and during the same will try to learn the art of investing.
This way after holding on to stocks like TCS, HDFC Bank, HUL, Asian Paints, Ultratech Cement among others for 10 years he will firstly make considerable returns and during the same learn about the stock markets as well. He will not be kicked out of the market due to his lack of experience but a new comer will not do this. A new comer will based on his irrational exuberance try to double his money quickly by putting all his worth on some unknown penny stock.
So that is what the difference is between professionals and market speculators. Finally, why am I writing this?
I am writing this because 10–15 years from today when some new person will read this he will understand the real mentality behind investing in the markets. See, what you need to understand is that to set up a business you need capital, talent, time, resources and what not. This means that it takes a while to establish a company.
Similarly for making money in the market as well you need knowledge, time, research and a lot of depth. So that is what you need to remember. Now coming to question of investing.
How should a new person invest?
See your investment strategy should be independent of market movement. You should not aim at timing the market. This means that if you are having Rs 100000 with you kindly divide this money in 40 small chunks of Rs 2500 each and then invest this money on a monthly basis in shares directly. Shares like I have shared above or based on your own solid research.
This way you will invest Rs 100000 in around 3 years and 3 months. Now you can take this example as a base and can increase or decrease the amount as per your financial health and life goals.
What you have to clearly understand is the concept of DISCIPLINE.
Discipline is crucial in investing. You can either get this discipline by doing mutual fund SIPs through direct mode or you can make your head really strong and do SIPs in good stocks.
I end by stating that when I look around today I see people as qualified engineers, doctors, lawyers and what not but not financially literate. Financial literacy is something which is hardly discussed in India. I hope this little write up of mine furthers the cause of financial literacy in India and reduces the myth attached with the Indian stock markets.
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