top stocks to invest in India now
Mohnish pabrais says that retail investor should invest only in mutual funds or index funds. Retail investors should not purchase individual stocks. Reason for this statement is that stock picking is not an easy job.
Stock picking involves analyzing various factors to identify stocks that have the potential for future growth and profitability. Here are some common steps involved:
Fundamental Analysis - Apply fundamental analysis to assess the intrinsic value of a stock. This involves evaluating key financial metrics such as revenue growth, earnings, profit margins, cash flow, and debt levels. Compare these metrics with industry peers to gain insights into the company's financial strength and performance.
Technical Analysis - Consider using technical analysis techniques to study stock price patterns, trends, and trading volumes. This analysis helps identify potential entry and exit points based on historical price movements and market indicators. Technical analysis can complement fundamental analysis in making informed investment decisions.
Risk Assessment - Evaluate the risks associated with the chosen stocks. Consider factors such as industry risks, regulatory risks, competitive landscape, market volatility, and company-specific risks. Diversification across sectors and industries can help mitigate risk.
Valuation - Determine whether a stock is trading at a fair value or if it is overvalued or undervalued. Various valuation methods, such as price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, price-to-book (P/B) ratio, and discounted cash flow (DCF) analysis, can help assess the stock's valuation relative to its earnings potential.
Monitor and Review - Continuously monitor your portfolio and review the performance of selected stocks. Stay updated on company news, industry trends, and market conditions. Regularly reassess your investment thesis and make adjustments as needed.
Retail investors do not have enough time and resources to conduct thorough research, diversify the portfolio, and stay informed to make right investment decisions. There are a lot of big fund houses that alreay research stocks on daily basis. Why not to take help from them?
Following the fund's portfolio
Motilal Oswal is the prestigious wealth management company in India and they run many types of mutual funds - e.g. small cap, large cap, multi cap, mid cap etc. And the cool thing is that holdings of these funds are public which means anyone can view what stocks they are holding in their funds.
So retail investor does not have to scan thousands of stocks listed on NSE and BSE. Retail investors can simply look at the top holdings of funds run by Motilal Oswal and copy the portfolio. Just repeat this exercise every month or quarterly basis and you should do really well.
Here are some of the best funds run by Motilal Oswal