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Be it about life, relationships, duty, karma, decision-making and even money; each chapter of Mahabharata has a meaningful lesson for us. One of the life and investing lesson is from the ground of Chakravyuh. No matter how determined you are, if you don’t have the complete knowledge about the subject, the outcome is always precarious.

The story of Abhimanyu, the youngest son of Arjuna and Subhadra, is an exemplary illustration of bravery yet marks the hazards of possessing only the half knowledge.

He was the valiant warrior, who is known for his tenacity, intrepidity and devotion. Though he appears in the stories of Mahabharata only for a short period, he is the most popular son of Pandavas and remains an inspiration for many readers.

Abhimanyu had mastered the art of archery and breaking into the war formation while he was still in his mother’s womb. Once, Arjuna was explaining the art of breaking the whirlpool to his wife. As Shubhadra fell asleep while listening to the story, Arjuna could narrate only half the technique. Ergo, Abhimanyu knew only how to break into it, he could never learn the art of destroying the formation. (There are different folktales on why Arjuna could tell only half the story to his wife. Irrespective of the version, the crux of the message remains the same).

This event played a key role in his death sixteen years later, when Kauravas challenged Pandavas in a war formation called as Chakravyuh. Only Arjuna and Krishna knew the art of breaking into and destroying the formation. However, they both were engaged in another war, a manoeuvre by Dronacharya to capture Yudishtira.

To save Yudishtira, he entered into Chakravyuh like a hurricane and decapitated many great warriors of Kauravas. To break the death shackles, Kauravas chalked out an illicit ploy to corner Abhimanyu. Many Kaurava warriors such as Drona, Kripacharya, Aswatthama, Karna, etc. circled & attacked the unarmed Abhimanyu. On Drona’s advice, Karna broke Abhimanyu’s bow from behind and also broke the chariot wheel which Abhimanyu used to shield himself. Unguarded, unarmed, tired and exhausted; Abhimanyu was at his most vulnerable position. Since Abhimanyu possessed only half-knowledge of entering the formation, he was not cognizant of how to destroy the formation. This gave an upper hand to Kauravas and they finally managed to ambush and kill Abhimanyu.

The death of Abhimanyu is one of the heart-wrenching stories of Mahabharata. However, it also teaches us an important lesson that ‘Half knowledge is dangerous’.
In the Indian stock market, many investors buy stocks on the basis of rumours, stock price, hearsays, etc. without understanding the underlying business model of a company. To aggravate the situation, they part away with the quality stocks when the stock price goes downhill.

One can go through huge piles of books written on value investing and how to invest like a pro. However, without conducting the fundamental analysis of stocks, it is difficult to create wealth via equity investment.

Here are some pitfalls of investing in the Indian share market with only partial understanding about a company:

1. Investing in penny stocks

The information on company management, financial, growth plans, risk management processes, etc. is limited on the public domain. Even if you may walk miles to gather information on a penny stock, you’ll never be able to get the complete picture of the underlying business.

2. Investing on basis of rumours and hearsays

There can be not a bigger sin to your stock portfolio than buying them on basis of rumours and hearsays. Many times, I have seen investors justifying their buying decision which was influenced by their broker or friend. Here, an investor needs to dig deep into the strength of the research and investment rationale of the person who has recommended a particular stock to them.

3. Selling or buying a stock on basis of their stock price

This is the most precarious decision that can happen to your long-term investment. Many investors in exuberance buy a particular stock only by looking at their stock prices in the past. Similarly, they hit the red button when the stock price plummets. As Peter Lynch states, ‘Know what you own and why you own it’.

When investing in a stock market, one needs to be armed with knowledge, patience and research to take an equity investment decision.

Abhimanyu possessed only partial knowledge about the war. He knew how to break into a war but was uninformed about how to exit. Similarly, if you accumulate stocks not backed by research and thorough understanding of the business model, you’ll only be able to buy that stock. However, you’ll always remain unenlightened on when to exit the stock. Mutating from the vicious circle of half-knowledge to virtuous circle of being empowered, informed and aware about the decisions and their consequences will not only help you to achieve success in the Indian stock market, but all walks of life. As much as you need to identify the right stocks, one also needs to identify when it is the time to move out of that stock.

If you have the resources in terms of time, patience and knowledge to conduct research and periodic monitoring of your stock portfolio, it’s great. Go ahead and start investing! However, if you fall short in any of the resources, it’s always a wise decision to hire a credible stock advisor/expert who can help you navigate in the right direction.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

Indian markets have been under huge pressure, due to a slowdown in the economy and weak corporate earnings growth. So it is quite natural that the portfolio of most investors has taken a hit and the same is the case with portfolios of best Portfolio Management Service (PMS).

Let’s take a look at some of the other factors which affected the Indian stock markets over the last 1.5 years:

Default of IL&FS

In September 2018, IL&FS Financial Services, a subsidiary company of IL&FS, defaulted in payment of interest on bank loans, deposits and in the redemption of commercial paper. As a result, rating agency ICRA downgraded the ratings of its IL&FS’s short and long-term borrowing. The defaults also put at risk thousands of small investors as well institutional investors like banks and mutual funds who had significant exposure to IL&FS. It also sparked panic among equity investors even as several non-banking financial companies faced turmoil amid a default scare.

Fears of a debt market crisis due to an IL&FS default prompted DSP Mutual fund to sell commercial papers of Dewan Housing Finance (DHFL). This resulted in a contagion effect in domestic stock markets with Indian benchmark indices correcting heavily.

Higher tax surcharge on foreign portfolio investors (FPIs) announced in the Budget

In the union budget for 2019-20, the finance minister announced higher tax surcharge on foreign portfolio investors. This triggered off a massive sell-off by foreign portfolio investors in domestic markets which continued for the next few months. Foreign Portfolio Investors (FPI’s) & Foreign Institutional Investors (FII’s) have been one of the biggest drivers of Indian stock market over the last 2 decades.

Ongoing round of trade wars between USA and China

There seems to be no respite in the trade wars between USA and China. The imposition of fresh tariffs by USA on China and vice-versa every time have resulted in a sell-off in American stock markets, prompting a rush for safe-haven assets such as US bonds and gold. With American stock markets taking a hit, the cascading effects can be seen in world-wide markets including Indian markets too.

The road ahead looks better for best portfolio management service

Over the last 1.5 years the number of negatives which influence stock markets have far outweighed the positive factors in the market which resulted in a negative returns for portfolios of even the best Portfolio Management Service. Small-cap and mid-cap stocks which form a large portion of portfolios of investors of best Portfolio Management Service have taken the biggest hit in the last 1.5 years.

However, the government has taken some concrete steps to boost the market, such as the rollback of the higher tax surcharge on foreign portfolio investors, reduction in corporate taxes and re-capitalization of public sector banks. With government doing everything possible in its power to uplift the economy and boost stock markets, the road ahead looks positive for investors.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

Are you looking for the best shares to invest for long term in India? Great, this is just the right time to choose the best shares to invest and build a strong portfolio as markets have corrected significantly and many fundamentally sound stocks are available at huge discounts.

Rather than looking for individual names of stocks which can be considered as the best shares to invest, an investor should understand what makes a stock an outperformer.

To find the best shares to invest for long term investment one needs to look for companies with certain qualities which give them an economic advantage over their peers.

Some qualities which will help you identify the best shares to invest:

Companies offering products/ services with a powerful brand recall value

When one talks about life insurance, the first name that is likely to come in the mind is LIC. Similarly when someone thinks of instant noodles the first name likely to pop-up is Maggi. These are powerful and well-established brands with a huge fan base.

A powerful brand recall value means repeat business for the company from its loyal customer base. This also means the users are more likely to recommend it to their friends and acquaintances. So to find the best shares to invest for long term, an investor should look for companies in India which have a powerful brand recall value.

Companies with economies of large scale

Companies with economies of large scale are better placed to produce goods at a cheaper rate than competitors. Tata Steel, a company of the Tata group is India’s second-largest steel manufacturer. Tata Motors, another company of the same group is India’s largest commercial vehicle manufacturer. Steel is a critical component of the commercial vehicle segment and since Tata’s are able to source it from their own group company they not only enjoy the benefit of economies of large scale but also a cost advantage. Hence when looking for the best shares to invest for long term, an investor should look for companies in India which have a powerful brand recall value.

Companies with monopolistic business model

Any company which is the only supplier of a product or service has a monopoly as there are zero no competitors. The best example of this is Coal India, India’s largest coal producer which contributes over 80 % of the coal production in India. Similarly, oil marketing companies like HPCL, BPCL and IOC have huge monopoly in the oil and gas sector.

To summarize, there are many factors which makes a stock an outperformer. The above qualities are some of the most important factors which can help you in finding the best shares to invest.

Disclaimer: The names of companies or stocks mentioned above have been used only for providing an example and should not be considered as a recommendation for best shares to invest.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

It is said that measurement is the first step, that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it and goes without saying, you can’t improve it.

In this story, we will be talking about how you can measure your portfolio performance.

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Let’s start with why should you measure your portfolio on a periodic basis?

Measurement of portfolio performance is an important part of an overall investment strategy. It helps the investors to understand whether their investments are taking them closer to their investment goals or further away from them.

It also tells investors whether they should change their strategy to achieve their goals.

So, how can you measure your portfolio?

Absolute performance

This is a measure of how much your total portfolio increased or decreased during a period. For example: if you had invested INR 1 lac in Jan 2018 and by the end of Dec 2018 it is worth INR 1.30 lacs, then your portfolio has increased by 30%.

Compound annual growth rate (CAGR)

CAGR shows at what annual compounding rate your investments are growing. For example: if you had invested INR 1 lac in Jan 2017 and by the end of Dec 2018 it is worth INR 1.45 lacs, then the CAGR of your portfolio is 20.42 %.

Relative performance

It is very important to use an appropriate basis of comparison because it gives a fair idea of the returns in general if you had invested in other opportunity.

The best index for comparison would be the Nifty 50 index that tracks the behavior of a portfolio of the largest and most liquid blue chip companies in Indian securities. Since it captures approximately 65% of its float-adjusted market capitalization, the Nifty 50 is a true reflection of the Indian stock market.

For example, if Nifty 50 gave a return of 2.2% between Jan-Dec 2018, but if your portfolio gave you an absolute return of 10%, your portfolio has outperformed by 7.8%.

How To Select The Right Method

Among all the above methods, CAGR offers the best measure for evaluating how your portfolio has performed over time i.e. when the time period is more than one year. CAGR helps fix the limitations of the arithmetic average return. But as you might be aware of, no investment moves in a strict linear path at all times specially during volatility. That’s the drawback of CAGR. It does not measure what happened to your portfolio in a particular year.

Wealth creation from equities is a long-term process. Some of your investment strategies may not work. In such a situation it makes sense to create a new strategy and move ahead. Just like a captain of a ship, it is your duty to measure your portfolio regularly to check if it is on course so that you can reach your financial destination safely and in a timely manner.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

Talking about 2017, the small and mid-cap segment enjoyed the eyeballs of the domestic and foreign investors. S&P BSE Small-cap Index skyrocketed by more than 50% whereas the Mid-cap Index surged by more than 40%. During the same tenure, Sensex marked an appreciation to the tune of 28%. Irrespective of the impressive growth trajectory in the past four years, many investors are scampering for an exit in these stocks.

Bargain Sale Is On For Several High Quality Small & Mid-cap Stocks

For many investors, the golden period for small and mid-caps seem to have vanished into thin air. After the continuous uptick in the prices, small and mid-cap have witnessed sharp corrections in the recent months. Since the beginning of the year, S&P BSE Midcap Index has plummeted by more than 10%, whereas BSE Small-cap has tanked by close to 12%. In the same period, 30-packed benchmark index soared by approx. 5%.

After the prolonged rally, more than 20 stocks have tanked by more than 30%.

So what has led to this meltdown? This segment which was attracting huge inflows from both domestic and foreign investors is now under pressure of massive sell-offs. Add to this, weak global cues, soaring crude oil prices, political uncertainty, depreciation of the rupee, high valuations, heightened market volatility and other macro indicators has forced many investors to pull back from the small and mid-cap segment. Clearly, investor’s sentiments have taken a complete U-turn. Many novice investors have these questions in mind:

Have we reached the dead end for small and mid-caps in India?

Should we divert our funds in only large-cap stocks now?

It is quite interesting to note that even though there is massive correction in the prices of the stocks in this segment, the fundamentals of few small and mid-cap stocks have not yet changed. Havells India, PVR, Natco Pharma amongst others are few examples that have marked healthy growth in their earnings. Even so, they are trading at comparatively lower prices.

This makes many investors shun this segment while making an equity investment. Due to the erosion in the price, many investors have already exited these stocks in a hope to iron out the wrinkles from their portfolio. However, that does not help much and in fact, deteriorates the health of the stock portfolio even further.

Separating Wheat From The Chaff

Most of the stocks have experienced correction in their prices. This definitely does not mean that all stocks will rise big in the future. When investing in stocks, it is mandatory to distinguish quality stocks from the rest.

For this, it is essential to conduct a thorough fundamental analysis of stocks. Investors should look out for stocks which boast of superior earnings visibility, business and management quality, company’s policies to manage the risks, adherence to compliance policies, consistency in cash flows, scalability of the organisation and ability to deliver performance over the time.

Irrespective of the downfall in the small and mid-cap segment, there are few quality stocks whose value have not deteriorated with time and possess all the attributes of becoming a multibagger stocks in the future. Such market correction opportunities should be optimized to start your SIP’s to accumulate the value stocks in the Indian stock market.

The only caution point is to stay invested for about 4-7 years to achieve significant wealth.

We at Research and Ranking stick to the basic tenets of value investing. Our endeavour is to pick the fundamentally sound stocks for you that have the potential to grow manifold over the next few years.

Here are the two solid small-cap stocks that are worth buying on dips:

1. NRB Bearings Limited

NRB is the global benchmark for quality and innovative design in high-precision friction solutions. NRB Bearings is a recognised leader in needle roller bearings, conventional cylindrical roller bearings and has developed a new generation of lightweight drawn cup bearings.

Market Cap (RS CR)	CMP (as on 13th June)	Price/Book	P/E	Industry P/E
1850.25	192.15	4.4.43	22.59	34.85

According to the Ball & Roller Bearing Manufacturers Association-BRBMA, the annual production of the domestic organized sector stood at Rs. 55bn in FY17, where NRB’s contribution stood at ~13%. According to various market research sources, the automotive bearings market in India is anticipated to cross $2.3bn by 2021, on account of expanding the fleet size and growing replacement market demand.

NRB, being an important player in the automotive bearings space with a leadership position in needle roller bearings, is expected to be a key beneficiary of robust automobile growth, incremental revenue from the Defence, Marine and Railway segments, and a revival in exports.

Going ahead, we expect the company to deliver ~18% CaGR in earnings over next 5 years period (FY18-FY23). The operational and profit margins are likely to be supported by strong client relationships in its category of bearings, volume growth in OEMs, revival in exports, incremental revenue from new segments like railways, defence and aerospace, customization led superior mix and benefit of operating leverage.

2. Subros Limited

Subros is supported by strong lineage and is well-equipped to ride the next wave in the automobile industry in India. Apart from its core business of car AC, the company has successfully forayed into a) Radiators business to Maruti b) Driver Cabin AC for Railways c) Condenser supply to Whirlpool and d) Blower Application for Trucks e) AC for bus coaches. Subros growth acceleration is driven by strong momentum in its core business of PV ACs, incremental revenues from new segments and improvements in margins through cost rationalization measures. Based on these initiatives we believe the company is poised for profitable growth over the medium term.

Market Cap (RS CR)	CMP (as on 13th June)	Price/Book	P/E	Industry P/E
1934.63	323.00	4.72	31.90	33.33

Remember: Stock market investment is all about stock selection and psychology. If you have identified stocks that can survive the rough storm and flourish with time, then do not allow transient hiccups come your way.

About our Vision 2025 Wealth Creation Strategy

India is being tagged as the fastest growing economy propelled by development in construction, manufacturing and infrastructure. Revolutionary reforms such as GST, Demonetisation has sowed the seeds of growth for tomorrow.

With India all set to become a $5 trillion by 2025, there are few stocks which have the potential to grow multifold by riding on the wave of India’s growth story. Value investors will have their eyes set on such stocks that have the potential to multiply by leveraging on India’s growth trajectory.

However, the sooner you invest, the better will be the rewards. The challenge would be to identify stocks to invest in that have high-growth potential. This demands time, patience and efforts.

However, you do not need to worry anymore as we have already identified the best stocks to buy today that can multiply 8-10 times over the next 7-8 years.

Invest Through SIPs – Buy Low, Sell High

Once you identify the right stocks, the bigger challenge is to stay rational and calm even during the tumultuous time in the equity market in India. By investing a fixed amount every month, you are able to accumulate more quantity of value stocks by investing every month. Under the Vision 2025 Strategy, every month you\’ll receive 1-2 recommendations which are backed by solid research. When the market corrects, you can invest more in these stocks, if you have enough funds at your disposal. It\’s not complicated at all. The answer is straightforward. Stay disciplined and allow time in the market to work for you.

Disclaimers:

1. The following article should not be construed as the Investment Recommendation.
2. It is safe to assume that this opportunity could be a part of the portfolio recommended to our paid customers.
3. Most importantly, since we design personalized portfolio as per your risk profile, this investment opportunity may or may not be a part of your portfolio.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

Long term investment in equity for wealth creation is just like a game of test cricket which requires a lot of patience and consistency. Some stocks have consistently performed over the last 10 years and created substantial wealth for investors making them ideal candidates to be known as best shares in the market.
Over the last 10 years, Indian equity markets have witnessed several ups and downs. While several well-known names like Reliance Power, Suzlon Energy, and Aban Offshore turned duds eroding investor wealth, few stocks outperformed by huge margin and can be definitely considered as the best shares in the market.

Let’s take a look at some of the best shares in the market.

From the above table, it is quite evident how the best shares in market have created consistent wealth for investors over the last 10 year period. While they come from different sectors such as cement, banking, and consumer goods sectors, what these best shares have in common is the fact that most of these companies are market leaders in their respective sectors or at least rank among the top 5 companies in the sector which they operate.

To understand why the above companies are the best shares in market let’s take a detailed look at some of these companies.

Take Maruti Suzuki India Ltd. for example which has given a return of 358% to investors in the last 10 years. An investment of Rs. 1,00,000 in Maruti Suzuki stock would have turned to Rs. 4,58,006 as on the current date. It has been the undisputed market leader in the passenger car segment in India for several decades now. The reason why Maruti Suzuki has managed to hold onto its no.1 position for years is the fact that it offers value for money products with unmatched service and reliability and has high brand recall value.

The stock of Titan has given a return of 1698% to investors in the last 10 years is a prominent company operating in India’s lifestyle goods sector. It is a leading player in multiple products such as jewellery, watches, and eyewear and offers several popular brands in these categories.

Best Companies Make Best Shares In Market

To summarize the reason these shares are called the best shares in market, because the companies behind these stock are exceptional companies. So when you are looking for best shares in market, keep legendry investor Peter Lynch’s quote in mind “Behind every stock is a company. Find out what its doing”.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

In my several years of experience of interacting with investors, I find that if there is one thing missing among most investors, it is self-realization.

In today’s story, let’s take a look at one of the most ignored aspects of investing; the need for knowing yourself before you start investing.

According to a great Greek Philosopher Aristotle “Knowing yourself is the beginning of all wisdom”.

Well, investing is like marriage. Because both require a long term commitment. In marriage, there may be initial hiccups just like volatility faced by investments in the short term. But with time, the bond of marriage becomes stronger, while investment tends to stabilize and give good returns when the magic of the power of compounding comes into play.

Now you must be wondering why this analogy between investing and marriage.

The reason is quite simple – when a person decides to get married, he/she looks for a person who matches their personality. So the entire quest for searching a life partner revolves around one’s one characteristic.

But sadly, the same approach is missing when it comes to investing. I see people asking more questions about the market, factors influencing the market and outlook of businesses. All questions are fine, no doubt. However, the starting point of investing should begin with knowing yourself.

So, which are the questions that you should ask yourself to understand yourself better?

Ask questions such as:

What are my financial goals and which are my short-term, medium-term & long-term goals?

What is my time horizon for each of these goals?

How much risk am I willing to take vis-à-vis the rewards that I will get?

So you see the first step in knowing yourself from an investor’s point of view is to decide your financial goals, decide the time horizon to achieve those goals, and decide the flexibility of those time frames if required.

Then, for each type of financial goal, an investor can decide on which kind of investment is best suited.

Before we proceed further, let’s take a detailed look at those questions which we mentioned above.

What are my financial goals?

Are you investing to save for a happy retirement or investing to buy a house or a car? Or is it because you wish to create a huge corpus to fund your child’s education or marriage?

It is said that “Setting up goals is the first step to turning the invisible into the visible”.

Hence, there are multiple reasons to invest, but as an investor, you need to be very specific about your financial goals. Once you’ve identified your goals, classify them as short-term (less than 1 year), medium-term (2-5 years) and long-term (5 years and above).

What is my time horizon?

Every goal has a different time horizon. For instance, retirement is a long term goal so that one can choose investments with high rewards but high risk. Whereas for short term financial goals such as buying a car or creating a corpus for your marriage, one needs to choose safer investments.

What is my risk tolerance?

It is imperative to understand how much risk one is willing to take. In simple terms, your risk tolerance means the degree of uncertainty you are willing to take to achieve potentially higher rewards.

To understand your level of risk tolerance, you can ask yourself questions such as:

Am I more concerned about losing money or losing purchasing power?

How much loss am I willing to bear?

Will I panic if my investments go down during a severe market correction or remain calm?

Will a particular type of investment cause sleepless nights for me?

The level of risk tolerance will also depend on factors like the number of earning members in the family. Along with this, your age, income, occupation, expenses expected in the future, etc. also should be considered. For example – if there is only one earning member in the family, the level of risk tolerance will be generally low, whereas if there are more earning members in the family, one can take more risks in their investment. Also, if you’re at the age of 30, earning modest and unmarried, you can take more risks as compared to an investor whose age is 60.

To conclude, when one’s investments are going up, it’s easy to assume that he/she is very risk-tolerant. However, the real picture is revealed when investments are sliding down. At this point, the investor’s true approach comes to the fore. Fears buried deep inside the heart can prevent an investor from taking risks to play safe, perhaps, but it also robs one of potential returns. A natural tendency to regret past choices may stop one from repeating past blunders, but it also stops one from retrying good investment strategies which simply didn’t work out the first time.

By better understanding how we feel, how we think, and what kind of personality we have, we get more insight into the forces that affect our investing behavior. And that might make us smarter investors.

That’s why it is essential to know yourself before you start investing. This will help you not just to make sensible investment decisions but also choose the best investments as per your financial goals.

Read more:  How Long-term investing helps create life-changing wealth – TOI.

I came across an online survey done by ET wealth that reveals “In India, only 12% of investors have a financial advisor.”

Markets can be a bit frustrating for first-time investors, especially during its sudden highs and lows. Last year in January 2018, when markets were touching its new highs, naïve investors like Vishnu and his wife were diligently preparing for their future goals with a corpus of around 3.5 lakh still remaining. They collectively planned to invest in stocks with the help of their friend’s stock market advice to make up for the remaining amount in short-term.

As it is well said, “Nothing comes for free”. The market collapsed, their investments stumbled.

On the other hand, Rahul was also a naïve investor who was a bit reluctant to invest in the stock market. The reason behind the fear was the heavy losses incurred by his father a few years back. Later when he came across some stock market advice by a financial investor over the ups and downs of the market, Rahul realized that he is missing out by not investing and planning for his long-term wealth creation plans. He started his research for the best equity research advisory services for a stock market recommendation. With the help of the right financial partner, he also got to know about how the stock market cycle work and systematic investments work.

These two cases underline the fact that the right advice at a right time can make a difference. DIY investing or investing based on hearsays can cause severe damage.

A stock market advisor gives you expert stock advice and identifies the best businesses for you as per your profile. With this, they help you with the right investment methodology during bear markets as well.

Here are a few most important reasons why you should seek an expert’s Stock market advice:

Designs A Solution Tailored To Your Situation

Stock markets are very volatile, these highly volatile market can cause huge losses. Every investor has short-term and long term goals and to achieve those financial goals investors, one need to wisely craft a well-defined wealth creation strategy. A stock market expert plays an important role by giving more goal-based solution to investors. They can provide you with customized solutions as per your need, risk appetite and financial objectives.

Helps To Take Decisions Backed By Facts & Empirical Evidence

A stock market advisor can identify the quality businesses with long term prospects through their analytical skills and experience over various business cycles. Often it is seen that stock market advisor can provide a financial acumen as well back you with detailed research reports.

They can give you best stock market recommendation that has high probability of delivering good returns and can also help you to identify non-performing stocks to save you from further losses.

Provides End-to-End Solution

The stock market advisor helps you with highly detailed reports, portfolio allocation, buying range, etc. Stock market advisor provides you with time to time stock market recommendation and quarterly update over the performance by keeping a hawk’s eye on your portfolio.

Rebalance Your Investments

Portfolio rebalancing is one of the services provided by a stock market advisor. Stock market advisor help you to rebalance your portfolio by identifying non-performing stocks by adjusting your assets allocation and identifying new investment opportunities to ensure you remain in sync with your financial goals.

Conclusion

With all the above-discussed points, we can clearly see that stock market professional can add immense value to the investment journey. With ease in the stock market recommendation and other services, a stock market professional can make your investing journey stress-free and hassle-free while helping you create wealth in a systematic way.

Read more:  How Long-term investing helps create life-changing wealth – TOI. 

Investors like Mr. Fickle are commonplace in the Indian stock market. What’s more astounding is their understanding of the company’s business model before they invest in them.

In the digital era, it’s so easy to buy or sell in a stock market. Get an online broker, fund your account, click on the stock, click on buy, and Voila! You just purchased the shares of a company. However, what next? Are the investors mindful of the risks inherent? Did the investors conduct fundamental analysis of stocks? Are the investors cognizant about the growth prospects? The answer to most of these questions is normally a BIG NO.

Stocks like Eicher Motors, MRF have grown 5-10 times, but were these stocks only moving uphill?

Let’s take a chart of Eicher Motors, a stock which grew 9-10 times in the last 5 years.

During this bout of growth, the multibagger stock plummeted by more than 15% for at least 3 times in these last five years. As you can see in the graph, the highest fall was recorded between the period of July 2015 to December 2015, where the investor’s earnings in this stock were eroded by more than 25%. Someone like Mr. Fickle would have lost his patience and would have exited the stocks, oblivious to the reason behind the stock fall. All he would have been concerned with is the market price of the multibagger stock. However, investors who scrutinised the financial statements and took time to conduct the fundamental analysis of stocks clung to this stock to reap better returns in the future. Investing is all about rigorous research. The more you study the companies and the sector, the better are your possibilities of success in the Indian stock market.

Companies like Eicher Motors and MRF didn’t turn 5 times or 10 times multibagger stocks in a day. Behind this stock is a business, whose value takes time to surface. You need to be patient while investing in such stocks and keep the media hype and rumours at bay. Conducting periodic review of such stocks to ensure that their fundamentals are still intact only adds to the probability of favourable returns in the Indian share market.

“Stocks aren’t lottery tickets. There’s a company attached to every share.” – Peter Lynch

Read more:  How Long-term investing helps create life-changing wealth – TOI. 

Now Read: Multibagger Stocks for 2023

Given the poor performance of the stock markets over the last several months with some exceptions in between, stock market experts believe that one could create substantial wealth by investing in multibagger stocks for 2019. A major reason for this is that there are many high quality and fundamentally sound stocks which are currently trading at attractive valuations. These stocks have the potential to become multibagger stocks over the next five to six years.

There more than 5500 stocks listed on India’s top stock exchanges. But not all of these stocks can be considered as multibagger stocks for 2019. Imagine the kind of wealth that can be created, if one could identify the next multibagger stocks for 2019, before everybody knows about it and starts rushing in to invest in the stock.

The below checklist can guide you in identifying multibagger stocks for 2019:

Does the company have good historical performance?

While past performance may not be necessarily repeated in future, it still gives prospective investor and market analysts a brief peak into what they can expect in future. Any company with a consistent record of growing earnings over a long term period such as 5 years of more definitely has a great chance of becoming a multibagger stock in future.

Does the company have zero debt or low debt?

Huge debt is a burden for a company and even if a company is making profits a significant portion of the profits will be consumed by the interest on the debt. As a result, the company cannot use its surplus funds for expansion of the business. On the other hand a zero debt or low debt company has plenty of funds to expand the business or diversify leading to new streams of revenue.

Is the company well managed professionally?

Stock markets value corporate governance highly and investors don’t mind paying a premium for it. Companies with good corporate governance are well known to place shareholder’s interest before management interest and have very high standards of disclosure of information which impacts shareholders. Infosys Technologies Ltd. and Wipro Ltd. are some prime examples of companies with highest standards of corporate governance in India and have handsomely rewarded their long term shareholders with multibagger stocks.

Some other pointers to consider while looking for multibagger stocks for 2019:

• Does the business offer an exclusive product or service?

• Is there a high demand for the company’s products and low competition?

• Is the business model of the company scalable with time?

• Is the stock trading at the right valuation below its intrinsic value?

The above checklist can help you to find multibagger stocks for 2019. But remember even if you do spot multibagger stocks for 2019 before it becomes the hot favourite of the market, it is very important to buy it at the right valuation, and remain invested in it to give the business enough time to realize its true potential.

Read more:  How Long-term investing helps create life-changing wealth – TOI. 

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