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There’s a high possibility that you came across this page while searching for the best long term investment stocks. Well, congratulations, you have come to the right place. 

In about another 100 words, we will reveal the list of the best long term stocks to buy in India. 

But only discovering the names of the best long term stocks will do you no good if you do not know the secret of creating wealth through these stocks. 

Yes. Contrary to millions of ‘getting-you-rich’ books, market experts and finance gurus, there are only two secrets to infinite wealth creation. 

These secrets are followed by some of the greatest investors of our times. From Warren Buffett, Benjamin Graham, Peter Lynch to our very own Rakesh Jhunjhunwala and Raamdeo Agrawal. 

These two secrets revolve around the 3 most powerful words in the stock market – Long Term Investing

But before we reveal anything further, as promised, for the busy readers getting late for office and okay not knowing the greatest investment secrets, here’s the list of the 10 best long term investment stocks to buy in India. Enjoy! 

StockReturns* in %Market Capitalisation
(in Cr.)
Bajaj Finance ltd.141.233,01,224
Coforge ltd.93.1817,067
Infosys ltd.89.435,86,204
Jubilant Foodworks ltd.83.8038,620
Tata Consultancy Services ltd.59.321,191,926
HDFC Bank ltd.49.657,99,408
Godrej Consumer Products ltd.44.5978,690
Crisil ltd.34.4914,155
ITC ltd.23.732,49,178
Hindustan Unilever ltd.17.845,70,730

* Returns after our recommendation on 6th May 2020 to 7th Jan 2021

Now for our disciplined readers, the two secrets for infinite wealth creation are: 
  1. Selecting top-quality stocks 
  2. Staying invested for the long term. 

Aren’t these secrets quite obvious? Shouldn’t all investors inherently follow them? Unfortunately, while obvious, 99% of investors fail to follow these basic long term investing principles. These ‘investors’ then wonder why they did not create infinite wealth! 

But we empathise with you. While common sense, discovering the best long term investment stocks is no easy task. It takes years of hard work, perseverance and a keen eye to discover the best long term stocks amidst the 4,500+ stocks in the market. 

StockBasket, India’s first long term buy and hold investment platform, runs more than 2 crore data points every day to discover the best long term stocks. 

We have already revealed the 10 best long term investment stocks to buy in India. So, you’ve already won half the battle. 

To win the other half, you need to commit to long term investing. But before making a long term commitment, you first need to understand the Power of Compounding.

Power of compounding is the single reason why an ordinary boy from Omaha is amongst the richest men on the planet! 

Did you know that Warren Buffett’s annual portfolio return is only 22%? On the contrary, Jim Simons has generated an annual return of 66%! 

But then why is Warren Buffett known as the greatest investor of all times while Jim Simons remains unknown? 

If returns are the only thing that matters, then why is Jim Simons not the richest man on the planet having beaten Warren Buffett’s portfolio returns by a whopping 44%! 

You’d be surprised to know that returns are not the most crucial component of long term wealth creation. 

The secret of long term wealth creation is the power of compounding. Warren Buffett selects great quality fundamentally strong stocks. No arguments here. But that is not the sole reason for his abundant wealth. 

“Warren Buffett’s strength lies in stock selection but his secret is the time! “

Warren Buffett started investing when he was 9 years old. He is 90 years old now. His investments have been compounding for almost a quarter of a century. On the other hand, Jim Simons started investing in good quality stocks in his late 50s. 

Simply put, even a 44% higher return couldn’t cover up the gains accumulated due to the Power of Compounding. 

So, there you go. Select fundamentally strong stocks and stay invested for the long term and you too shall create infinite wealth. 

But the next logical question is, ‘Which among these best long term stocks should you buy first? It might be possible that you do not have the funds to buy all 10 long term investment stocks at one go. 

So. how should you go about investing in these best long term stocks? 

watch our video to learn about long term investment strategy

There are two ways to invest in our shortlisted long term investment stocks. Either you invest on your own or through StockBasket. 

When you invest on your own, you might buy some stocks and miss out on others. But when you invest through StockBasket, you get to invest in all these stocks proportionally. So, you never miss the wealth-creating potential of any of these stocks. 

You might think, ‘What is StockBasket?’. 

StockBasket is the smartest way of investing in the stock market. StockBasket is India’s first long term investing platform

When you invest on your own, you might not have the time or resources to constantly track all individual stocks. StockBasket, courtesy of its 60+ intelligent parameters monitors the quality of stocks and only includes the best stocks in each basket.

Who Should Invest in StockBasket? 

StockBasket is created with the principle that every investor whether big or small, should have access to wealth creation via the stock market. 

You should invest in StockBasket if you are: 

  • A long-term investor, who knows wealth can only be created by staying invested in quality stocks for a long period.
  • A student, who wants to make the ‘perfect’ start to stock market investing. 
  • A salaried professional wanting to achieve your financial goals. 
  • A seasoned investor, who has created some wealth in equity markets and understands the nitty-gritty of the stock market.
  • A senior management professional, who does not have the time to track markets but wants to create wealth in the stock market.

Why should you invest through StockBasket? 

You should invest in StockBasket as it follows the two most important fundamentals of long term wealth creation – Superior stock selection & investing in them for the long term. 

StockBasket has SEBI registered expert-curated ready-made baskets of stocks, suited to each and every financial goal. Each basket contains the absolute best long term stocks to buy in India. 

Our confidence in our research is so strong that we offer a unique ‘5-year fee refund guarantee‘. So, if you don’t make money in any of our recommended baskets in 5 years, then the entire subscription fees collected from you over these five years, will be refunded.   

StockBasket investments start from as low as Rs 3,500 to Rs. 15,00,000, and it takes only 5 minutes to open a StockBasket account.

One of my favourite quotes is, “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

As you watch the paint dry or grass grow, these articles will make up for an excellent company! 

I’ll be back with many more such ‘interesting’ articles. For now, Ciao! 

We are sure that everyone would have heard about the Aesop’s fable about the Tortoise and the Hare story. A tortoise challenges the hare to have a race and how the hare gives him a big lead, thinking the tortoise would take to much time to reach, he takes a nap and how the tortoise, in the end, covers the distance and ends up being a winner.

What does this story teach us?

It may sound so untrue that the slow tortoise wins in the end but this does make sense when we think about long term investment. Considering the case of and investor where you can take short term investors or traders or speculators to be the hare and the long term investors (or just investor) to be the tortoise. Traders show the same characteristics of a hare, they take short term positions to make money in the quickest form. They usually take a high risk which shall be avoided unless you don’t have proper knowledge of technical analysis. On the other hand, long term investors do fundamental research and invest with a view of getting superior returns in the long term.

Hare are impulsive, impatient and look for instant profit booking, whereas Tortoise is patient, persistent and are mentally prepared to wait for a while.

Let us compare some characteristics a Trader and Investor

CharacteristicsTraderInvestor
Personality Hare (Impatient)Tortoise (Patient)
RiskMedium to HighLow to Medium
Time HorizonDay, Week, Month, YearYears, Decades
StressVery HighLow
Charges paidVery highLow

They both follow a different style of investing, but when it comes to generating superior wealth, the tortoise will be the ultimate winner, to prove this let us discuss the benefits of investing with the style of a tortoise (i.e long term investing)

Invest in 5years low risk regular

Benefits of Long term investing:

  1. Power of Compounding“Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”  -Albert Einstein. Compounding gives the benefit of interest on interest thereby generating a good amount, many of the famous investors live Warren Buffett have earned huge amount by staying invested for the long term and enjoying the benefit of Compounding.
  2. Low Risk: Staying invested in the market reduces the risk by removing the lost opportunities that happen in the market. Continuous buying and selling could result in missing the big up days in the market
  3. Emotions are out of equations: The best aspect of long term investing completely removes the emotion equation which is the major cause of bad investment decision which can lead to huge losses
  4. Your Money works for you and you can sleep well: The stress level of an Investors is very low as he adopts the buy and hold strategy, where he does not have to worry on, everyday trades like that of a trader and can sleep peacefully.
  5. Low Commissions or Trading charges: The lesser the transaction the lesser is the commission or trading charges and the larger is the profit booked over time.
  6. It’s Easy: Buy and hold strategy requires a little fundamental research and all that you need to do is to be patient and hold your stocks for the long term, allowing compounding to do its magic, this is comparatively very easy w.r.t to trading where we have to time the market to book profits and which also requires sound technical knowledge.
  7. Tax Savings: Long term investments are taxed less in comparison to the short term which will automatically save some good amount of money for you

In the end, we can summarise that retail investors should follow the tortoise strategy(i.e. Long term investment) to grow their wealth and should invest in good quality stocks for the long term. The same philosophy is followed by StockBasket – which is India’s first long term buy and hold investing platform which has expert-curated baskets of stocks.
Investors can invest in StockBasket by opening an account with Samco Securities. StockBasket core principle says that an investor should invest in superior quality stocks and hold them for at least 5 years period to get superior returns.

Long term investor believes in buying and holding a particular stock for the long-term as his way of creating wealth and generate passive income. They do not track the price of the stock but analyze the value of the business. This is commonly known as ‘Value Investing Principle of Investment.’ They believe in the fundamentals of the company, and they analyze by comparing ratios, profitability, growth, customer base, geographical presence, quality of management and sustainability of the company with other peers in the same industry. Here are a few things to keep in mind before starting your career as an investor. There are some Costly Investment Mistakes that a naïve investor should avoid in his preliminary phase of the career. 

  1. Timing the markets 

Investors generally wait for the right time to enter. Well, it is important to enter at the right price, but no investor has been successful in predicting the next move of the market. Incorrect entry and exit are one of the most common but costly mistakes that investors tend to make. Their decision to invest in stocks depends on acquaintances. One should not invest in stocks just because other people around are doing so. Such practices often yield subordinate returns in the long term. Instead of timing the markets, it is essential to invest consistently and regularly by spreading out the investment corpus at various time intervals. This will allow the investor to take advantage of rupee cost averaging and watch the investments grow and compound over time.

2. Use of Margin to create leverage for investment

Let us understand the meaning of leverage using Margin money. Margin is simply a loan extended by the broker that allows the investor to enter larger trades on borrowed funds. Leverage in any business means the use of debt to finance the assets. Essentially, leverage will enable you to pay less than the full price for a trade, giving you the ability to enter more significant positions even with a small amount of capital. Historically, debt has proved to be a way for exponential business growth. However, the ability to repay within time is a crucial factor. With long term investing, the leverage can affect the overall returns of the portfolio drastically and wipe out the capital as well.

3. Investment in penny stocks / small caps stocks

One of the most consistent mistakes that the majority of inexperienced investors tend to make is being attracted towards small caps stocks. The reason for this (ultimately dangerous) attraction always comes down to the potential returns and an opportunity to earn higher returns very quickly. In a single week, the price might jump from INR 2 to INR 20. 

Well, it’s an illusion, make no mistake about it. Not all small-cap stocks give such returns. One of the critical investing principles given out by Peter Lynch – ‘Invest in what you understand.’ This has been emphasized and reiterated by many fundamentally profound investors to date. Warren Buffet said that ‘Risk comes from not knowing what you are doing.’

Well, this has been the case for many penny stocks too. With limited information, restricted market participation and lack of liquidity prove to a costly mistake for the investor.

If you pick the right stock, the returns can be exceedingly vast. As against this, choose the wrong stock can erode your entire capital.

4. Lack of Patience

Investors saved money back in the stock market is arguably the single most effective plan to become wealthy. But investing will not make you rich overnight. Unfortunately, many people have high expectations, and when those are not met, such hope can lead to disappointment and cause them to leave investing altogether. Investing is a slow and consistent process that will help an investor to build sustainable wealth. Mr Warren Buffet became the richest person in the early 50s, i.e. after more than 30 years of investing career and continued to remain in the top 10 billionaires list even today. It is essential to be right in your stock selection but more important to be consistent with your decision making.

5. Over Diversification

It is important to have a strategic asset allocation and focus on the benefits offered by Diversification. Mr Warren Buffet had once said that Diversification is a protection against your ignorance. Diversification has proved to be an important risk management technique to mitigate the idiosyncratic risks from specific investments. However, Diversification comes at a cost as it limits the upside returns of the portfolio as well. If an investor is not careful, Diversification could easily lead to over-diversification, impacting the overall profitability of the portfolio over the long term. Over Diversification would lead to loss-making assets evening out the profit-making investments – resulting in lower returns from the portfolio.

To prevent over-diversification, investors must study the business dynamics, industry insights and business models to understand the specific exposure of each investment. 

6. Psychological barriers / Emotional investment

Greed and Fear are the two emotions that drive the market movement daily. The perception of an investor towards risk changes as per the market volatility. The veteran investor Mr, Warren Buffet has said that “Be Greedy when others are fearful and be fearful when others are greedy.” However, it is better said than done as most of the investors are somewhat cautious in a bear market and over-optimistic when the markets have already outperformed. This defies the Value Investing principle leading to improper entries and exit in the market, increasing the potential losses on the portfolio. For a successful investing career, it is imperative to refrain from the emotional biases for any investment. Psychological barriers create a rather inconsistent and indiscipline investing approach affecting the returns from the portfolio.

Investing is not easy, but if the investor steers clear from any one of these pitfalls, it can make a material difference in the portfolio. Making mistakes is not a problem until one learns from the same. 

With regards to long term investments, it is crucial to invest wisely in those outlays which provide optimum risk component as well as promising returns in the investment horizon. One of the critical strategies to reduce the overall risk of the portfolio is with the help of ‘Sectoral Diversification’. It reduces the risk of your diversified portfolio by allocating funds in various asset classes at a very minimum cost. However, it is imperative to identify promising sectors by making some forward-looking estimates. Sectors such as mining and utility have shown slow growth in the past, whereas industries such as finance, transport, retail, aviation, agriculture are rapidly growing. Growing sectors are essential for safe and prolonged investments. However, it is furthermore crucial to understand the viability, sustainability, profitability and survival of a particular business because of the rapid change in technology, business dynamism and market conditions. Taking an example of Pharma sector was an underperforming sector since last 4-5 years. However, it has shifted gears recently and outperformed the broader markets in recent times. Change in the external environment affects the decision making and asset allocation of the investor. 

Here are a few promising sectors to watch out for:

  • Information Technology (IT)

Without a doubt, India is moving towards becoming a digital economy. Being one of the fastest emerging sectors, IT has shown global reach, lower risk, high- quality infrastructure, and connectivity that contributes immensely to the Indian economy. Its growth is escalating due to components such as BPO and government initiatives such as Digital India, MeitY Startup Hub (MSH). With technical services coming into the mainstream, IT sector shows escalating growth potential for the long term investment. Further, most of the industries like shopping, education, health and fitness are moving online, leading to increased demand for the IT infrastructure.

  • Pharma (Pharmaceuticals)

India is one of the largest exporters of generic drugs, globally. The current health crisis has been a blessing in disguise for the pharma companies. The companies were under a long term bear market since 2014 and have recently bottomed out and entered a long-term potential bull market. The consumer expenditure on medicines for chronic diseases is projected to go higher, paving the way for investments in R&D by the companies. Besides programs for rural health, preventive vaccines, and mass checkups augur well for pharmaceutical companies. Amidst the pandemic situation, the market is going bullish on pharma and healthcare sector following the increase in demand for medicines and drugs. The current health crisis has put doubts in the minds of the people on personal hygiene and safety. There are more cautious and careful in their way of living, leading to more fear amongst individuals. Fear of death has always contributed to the success of the Pharma companies. 

  • Fast Moving Consumer Goods (FMCG)

It is one of the most potent and defensive sectors serving essential items. It will always remain in business irrespective of the overall market condition, i.e. they have a constant demand, thereby providing consistent returns even if the economy faces historic low. These companies continue to deliver daily household items to an established consumer base. Being the fourth largest sector in the Indian economy, central initiatives like Food Security Bill, direct cash transfer subsidiaries support the growth of this sector. With the urban segment being a significant contributor to the volumes of such companies, there is a lot of unpenetrated potential in rural India. 

  • Telecommunication

India is one of the largest data consumers countries in the world, with the usage of a monthly average of 9.8GB per consumer and is expected to double by 2024. With a daily increase in subscriber base, app downloads, affordable tariffs, and broader availability, this sector shows exponential growth. It remains promising in the future as rural segment developments have also started. Work from home and increases usage of data amidst the COVID situation has benefited this sector. Telecom sector has recently seen some foreign direct investments from global giants like Facebook Amazon and Google, along with few of the top private equity players across the globe as well. To become a Digital Economy, Telecom Sector has to be one of the biggest beneficiaries in times to come. Telecom shows excellent prospects for a safe investment. 

  • Non-Lending Financial Sector

The non-lending financial sector would include companies in the insurance, asset management and securities business. These businesses have a little penetration, i.e. lower customer outreach as compared to the overall population of India. With an increase in financial literacy programs in India, the demand for insurance products and new Demat accounts is bound to increase. Also, the overall change from a saving economy to an investing economy shall lead to higher participation from the retail population into the capital markets. Currently, a small percentage of the total population is investing in Mutual funds, and an even lower portion of the population has insurance as a risk cover. Therefore, there is a vast potential in the Indian markets, which is unpenetrated. 

  • Argo-Chemical and fertilizer

Indian chemicals companies will benefit from the expanding speciality chemicals market globally led by manufacturing shifts from China following the outbreak of a virus. Countries across the globe are looking for an alternative to China to reduce its dependency on a single country. Indian companies could benefit from such a demand shift globally by capitalizing on the export of such chemicals.

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