Investing for the long term is a popular investment strategy that intelligent retail investors use to grow their money. Benjamin Graham, the father of value investing, defined smart investing as someone who doesn't try to time the market, but values "time in the market" by choosing the investment options that work best for you and not investing on hearsay. When looking for the best share to buy for long term, along with fundamentals and qualitative aspects like management quality and efficiency of management, financials should be viewed from a long-term perspective. The long term is usually more than 5 years for investors.
This blog has compiled a list of the best shares to buy for long term for 2023 - 2024
Here is a list of the best shares to buy for long term:
Long-Term Stocks India
Tata Consultancy Services (TCS)
Factors to consider before choosing the best shares to buy for long term in India 2023
Here are some factors to consider before investing in stocks for the long term:
• The Market Capitalization of the shares Should be at least More than Rs 10,000 crores
Simply put, market capitalization is the market value of a company. The price at which you can buy all the company's outstanding shares. It is calculated by multiplying the number of shares outstanding by the cost per share traded in the market. Since the stock price is a dynamic number, the market cap also changes frequently.
It tells the size of the company. The more prominent companies with higher moving stops have already reached a certain stage and are less vulnerable to volatility with lower risk levels.
Therefore, for guaranteed returns and lower volatility, high market capitalization is an excellent measure to single out companies and long-term stocks to invest in.
• Profit growth for three years Should Be More Than 10%
While operating profit only takes into account the core business, net profit takes into account all aspects of the company. It also accounts for costs such as taxes and interest expenses for an outstanding debt and reflects the actual earnings of the entire business.
Net profit is at the bottom of the income statement after all costs and expenses have been accounted for, hence the bottom line.
Best share to buy for long term: Overview
Here are some options for long-term investments:
1) Reliance Industries
Reliance Industries Limited is an India-based company operating in the Oil to Chemicals (02C), Oil & Gas, Retail, Digital and Financial Services segments and is one of the best share to buy for long term.
2) Tata Consulting Services (TCS)
Tata Consultancy Services Limited (TCS) is an India-based company engaged in providing information technology (IT) services, and digital and business solutions. It is one of the safest share to buy in India.
Infosys Limited is dedicated to next-generation consulting, technology, outsourcing, and digital services. It is a leading global digital services and advisory company.
4) HDFC Bank
HDFC Bank Limited (the Bank) is a private-sector bank based in India. The bank offers a range of banking services covering commercial and investment banking on the wholesale side and transactional/branch banking on the retail side.
5) Hindustan Unilever
Hindustan Unilever Limited is an India-based mass consumer goods company. It is a subsidiary of a British company called Unilever. It is headquartered in Mumbai and is one of the most famous FMCG companies in the world. Therefore, its shares are often a top choice of investors.
Additional things to remember
- Pick a few financials, look at qualitative aspects such as the quality of management, ethics and CSR activities, and evaluate them based on historical information of three or more years.
- Based on their market capitalization, filter companies pick leaders from respective industries that have shown proven long-term sustainable performance.
- Align your level of risk with the risk of the company. Conduct a business and industry analysis to understand industry-specific drivers and risks.
- Invest in a company only if you understand it and what it does.
- If you plan to invest in any of the above-mentioned stocks or any other stock, you should consider using a brokerage calculator. This will help you calculate the brokerage fee the broker earns for facilitating the trade.
This was our list of the Best shares to buy for long term in 2023. Time lets your returns compound over time. If you don't withdraw your earnings or interest earned in half, it multiplies your earnings by a cumulative number instead of just your principal; your returns will compound manifold.
Time helps us rule out volatility and short-term risks. If you invest Rs 1,000 in the first year and earn 10% return, the amount at the end of the first year will be Rs 1,100. If you let your money accumulate over time and do not recoup your returns, next year you will have returns of Rs 1,100.
Now do this exercise to get higher investment amounts and for a longer period. This is because the essence and magic of any investment is in the long term.
Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.