Most investors choose stocks because they want to increase wealth in the long run. What is wealth? According to Investopedia, ‘Wealth measures the value of all the assets of worth owned by a person, community, company, or country’. This definition varies depending on a person’s view of wealth. However, everyone wants to be wealthy. Whether it is an industrialist or the pani puri seller, wealth is a person’s aspiration. Since stocks provide higher, inflation beating returns in the long run, a number of investors want to invest in them. Before investing in the best stocks in India for long term, you need to understand how they work.
What is stock investing?
When you invest in the stock market, you are investing in our economy. When you buy a stock, you are owning a company as you are funding the company’s activities. If the company does well, the economy will do well. So, stock market investing helps improve the economy in the long run.
The company whose stock you own does well, it will give income to the shareholders in the form of dividends. And the company gets really popular, its shares are sought after. The share price of the company will go up. When you sell them for a price that is higher than you purchased them for, you will get capital gains. The best thing is that if you hold a share for more than a year, you do not need pay any tax on gains of less than Rs.1 lakh. Even if the gains are more than Rs. 1 lakh, the tax is just 10%. This is an advantage to investors.
How risky are shares?
Investing in shares is a long-term commitment and the risks reduce the longer you stay invested in quality stocks. That’s why you need to know which are the best shares to buy. Typically, there are several top shares to buy and investors can get good returns if they stay invested for five or more years. You shouldn’t bother about short term volatility as long as you know that you have chosen good stocks.
Expert investors will consider any and every market fall a good one because it is an opportunity for them to buy their favourite stocks at discounted prices.  However,note that cheap stocks are not always the best stocks to buy in India. You need to consider the company’s financials, business, competitors etc. to understand whether it is a value stock. Only high-quality stocks can provide good returns when invest for the long run.
How to invest in the stock market?
There are many shares to buy today in the Indian market. However, you will need a broker to facilitate your investments in shares. You can get an online broker or an offline broker. Online brokers work on the discount model and their charges are cheaper. However, novice investors should consider brokers who have advisors to help invest in the right stocks. Most brokers who have an established practice employ market experts who assist investors. So, they have an edge over other brokers when it comes to expertise. If you don’t know which share to buy, they will help you invest in the right ones.
Once you have a broker, you will need a demat account. All listed shares in India are in the dematerialised format. This means that shares are held electronically. So, to invest in shares, you need to open a demat account. Once you open your demat account, you can consider the best shares to invest.
Best Stocks To Consider Investing For Long Term
Here are some stocks that have done well in the past and can be considered for long term investments.
| Company | Price per share (Rs.) | Market Cap (Rs. Crores) | Dividend Yield | 5 Year Return |
| Hindustan Unilever | 2319 | 2,09,275 | 1.21% | 168.19% |
| Tata Consultancy Services | 2825 | 2,95,678 | 1.42% | 131.58% |
| SBI | 269 | 1,03,384 | NA | 16.52% |
| HDFC Bank | 1440 | 6,13,297 | 0.52% | 166.61% |
| Infosys | 1164 | 4,27,005 | 1.85% | 110.28% |
| Hero Motocorp | 3115 | 40476 | 2.89% | 17.37% |
| Bajaj Finance | 5262 | 1,36,456 | 0.19% | 818% |
| GAIL | 123 | 23,003 | 5.9% | 28.36% |
| HPCL | 227 | 17,218 | 4.31% | 22.41% |
Think stocks aren’t for you? You can start your investment journey with equity mutual funds. Mutual funds invest in stocks on your behalf and the portfolio is managed by the Asset Management Company. Equity diversified funds are the ones you should start with because these funds invest across different companies. Want to explore the best mutual funds? Then, click here to invest.
