Do you know the secret to Warren Buffett, Benjamin Graham, Peter Lynch, or Rakesh Jhunjhunwala & Mohnish Pabrai’s infinite wealth?
It’s no complex mathematical riddle. The secret to creating infinite wealth is - ‘Long Term Investing’.
Yes, all these investing legends have created their fortune through a simple yet disciplined and profitable investment approach - Long term investing.
The main purpose of this article is to teach you the basic principles of long term investing. We will also reveal the top 10 stocks to buy for long term.
For our busy readers getting late for office, here’s the list of the 10 best long term stocks in India.
List of the 10 Best Stocks to Buy in India for Long Term 2021
|Stock||Returns* in %||Market Capitalisation
|Bajaj Finance ltd.||141.23||3,01,224|
|Jubilant Foodworks ltd.||83.80||38,620|
|Tata Consultancy Services ltd.||59.32||1,191,926|
|HDFC Bank ltd.||49.65||7,99,408|
|Godrej Consumer Products ltd.||44.59||78,690|
|Hindustan Unilever ltd.||17.84||5,70,730|
* Returns after our recommendation on 6th May 2020 to 7th Jan 2021
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So, now that you have the list of the 10 best stocks to buy in India for 2021, what should you do next?
The most reasonable next step would be to invest in these best long term stocks. But what if we told you that you are wrong?
While the secret to wealth creation is simply long term investing, investing blindly in these stocks will not lead to long term wealth.
So before you invest in these best long term stocks, let’s quickly cover the basics of long term investing in India.
What is Investing?
As per wikipedia, ‘To invest is to allocate money in the expectation of some benefit in the future’.
In simple terms, investing is when you put your money into any asset to achieve returns. The asset can be financial assets like shares, mutual funds, ULIPs or non financial assets such as real estate, gold etc.
The main goal of investing is to make more money.
What are the types of Investing?
Broadly, Investing can be of two types namely:
- Short term investing: Short term investing can range from minutes to hours (intraday trading) to days (position trading). Short term investing is largely dependent on technical analysis. Short term investing is highly risky and is suited for aggressive investors with ample time and market knowledge.
- Long term investing: Long term investing is the best approach to long term wealth creation. Long term investing is a ‘buy right sit tight’ investment approach which demands a lot of patience from investors.
Typically, any investment made for more than 10 years is classified as long term investments. Long term investing is heavily dependent on fundamental analysis. Shares and mutual funds are common long term investing tools. Coffee-can portfolio is the perfect long term investing approach.
Why is Long Term Investing Important?
Long term investing is a dying form of investing. With free stock market tips, making quick money is the name of the game. But this ‘get-rich-quick’ scheme can prove to be detrimental for you. Short term investing is a game of luck. And as the majority of common investors would agree, luck never seems to favor them.
While unfortunate, there is a blessing in disguise here. Since luck plays a decisive role in short term investing, the best foolproof way for a common investor to create wealth is through ‘long term investing’.
Long term investing is important as it instills discipline and patience in investors. Long term investing also helps investors take full advantage of the Power of Compounding.
Power of Compounding has been described as the 8th wonder of the world by Albert Einstein.
Let us understand how the power of compounding in the best long term stocks lead to infinite wealth creation.
|Time Horizon||15 years||20 years||-|
|Rate of Return||15%||15%||-|
|Total Investment Amount||1,800,000||2,400,000||6,00,000|
As evident in the above table, there was a difference of only 6 Lakhs. But due to the Power of Compounding, this difference of 6 Lakhs grew to a whopping 77.90 Lakhs!
This is the Power of Compounding. For every year you delay, you pay a huge price. The only way you can achieve power of compounding is by practicing long term investing.
Guidelines before investing in 10 Best Long Term Stocks for 2021
Long term wealth creation is a major commitment. It tests your patience and resilience. You cannot back out once you commit to long term investing.
The 2 crucial tips before investing in the best long term stocks for 2021 are:
Stock selection is critical: Majority of investors fail the very first step of long term wealth creation - stock selection. They invest in penny stocks with one-in-a-million odds and then blame the stock market when their luck doesn't work.
Remember, just because something is available cheaply doesn't mean that it's the best long term stock to buy. When investing for the long term, it is utmost important to be invested in the right stocks and not duds. In an ideal world, you'd want to be invested in Reliance Industries not Reliance Communications!
Timing the market is impossible: No one can time the stock market. Many have tried and failed. It simply cannot be done. So, then when is the best time to invest in the best long term stocks?
The simple answer is, there is no right or wrong time to invest in long term stocks. As long as the stock is fundamentally sound, whether you buy it in a bullish market or a bearish market is irrelevant. The most important aspect is to buy the fundamentally strong stock.
So, select the best long term stocks and then invest in these stocks in a disciplined manner without timing the markets.
How can you, a common investor, select the best long term stocks to buy in India for 2021?
The honest truth is you cannot. You are busy making money to achieve your financial goals. After a tiring work day, you would not have the resources, time or even inclination to research the best long term stocks to buy from the 4500+ stocks in the market.
Without proper research, how can you invest in these best long term stocks? Don’t worry, the answer to all your stock market related problems is - StockBasket!
StockBasket is India's first long term investing platform. StockBasket uses a unique proprietary model which processes more than 2 crore data points every day and based on 60+ intelligent parameters decides the quality of stocks and only includes the best stocks in each basket.
Why should you invest in the best long term stocks in 2021 through StockBasket?
StockBasket Performance - 2020
StockBasket’s stellar record speaks for itself. StockBasket has thrashed the abysmal returns generated by asset classes such as Mutual Funds, Gold, PPF, Bank FDs, Real Estate and Bonds.
Before you go, find out how much wealth you can make using the Power of Compounding
StockBasket has handpicked and expert- curated baskets suited to each and every financial goal conceivable to an investor. Each basket emcompasses the best long term stocks to buy in India for 2021.
There is the 'Beginners Basket – Lite' specially created for first-time amateur investors who need guidance while investing in the stock market. The 'beginners basket - lite' has a minimum investment amount of approx. 3,500.
Similarly, for the more experienced and seasoned investor, there is the '4X Target in 10 years' basket, which has the potential to grow the corpus by 4X times in 10 years.
StockBasket runs on a simple fundamental principle: 'If you invest in quality stocks and give them ample (long) time to grow, then you are bound to create infinite long term wealth.’
Such is our faith in our recommendations that we offer a unique '5-year fee refund guarantee'. The idea is simple, 'we make money only when you make money'. 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.
StockBaskets investments start from as low as 3,500, and it takes only 5 minutes to open a Samco trading account. To sweeten the deal, you also get a '5-year fee refund guarantee'. Long term investing cannot get any simpler!