The general perception is that investing in stock markets is very risky. there are two aspects which go into investment in stocks. Firstly choosing the right stocks & secondly purchasing the stocks at the right time. We may choose some tried and tested blue chip stocks or analyse a Company & decide to invest in that business. The most difficult aspect of investing would be to time your purchase. Time and again we have seen that after we purchase a stock there is a decline in markets leading to a fall in share price. One way of negating the risk of timing your purchase is to invest in a staggered manner. Once we decide on the stock to invest in, we can do a SIP in the stock, invest in a systematic monthly installment just like an SIP in mutual funds. Just like there are no short cuts in life , there are no short cuts in investing. The best & safest way to invest is to accumulate it slowly and steadily. Just as the tortoise says- slow but steady wins the race. Lastly stock investments should always be done with a long term perspective and stocks should be bought with the mindset as if you are buying into the business.
Find below a table of monthly systematic investment in some stocks till the end of January 2017. I have selected a few stocks which I like:
Rs.5000 invested every month has grown to… | ||||
1 year | 3 years | 5 years | ||
Amount Invested (Rs.) | 60000 | 180000 | 300000 | |
Stock | ||||
Bharat Electronics Ltd | Amount | 73937 | 331175 | 785579 |
SIP Return | 40% | 42% | 39% | |
HCC Ltd | Amount | 108504 | 318604 | 669812 |
SIP Return | 151% | 39% | 32% | |
ITC Ltd | Amount | 66693 | 202910 | 367710 |
SIP Return | 19% | 8% | 8% | |
Motherson Sumi Systems Ltd | Amount | 71218 | 239115 | 814710 |
SIP Return | 32% | 19% | 40% | |
SRF Ltd | Amount | 73321 | 390479 | 1463019 |
SIP Return | 38% | 55% | 66% | |
SBI | Amount | 74354 | 206271 | 366438 |
SIP Return | 41% | 9% | 8% | |
L&T | Amount | 64784 | 181396 | 368550 |
SIP Return | 13% | 0% | 8% | |
SAIL | Amount | 84077 | 199674 | 307773 |
SIP Return | 71% | 7% | 1% |
Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’