Best Stocks to Buy Today: How to Find Them?
If you are interested in the stock market then you must have sometimes heard from friends, family, brokers, etc. that you should invest in a particular company’s stock that someone recommended as a ‘tip’. This ‘tip’ or advice to invest in a particular stock usually originates from an internal and reliable source. This type of trading is better known as ‘insider trading' in the stock market, this trading practice has been prohibited by SEBI on the Indian stock exchange since 2013.
The reason for the prohibition is quite simple. Whether it is legitimate or an illegitimate action comes later, this is not the way you should invest in shares. Most of the sources of these ‘tips’ are extremely unreliable as the news and information about these kinds of stock purchases are often purposefully spread around without any reliable background checks. Those investors and shareholders who are mostly trading with this kind of information, in most cases, end up losing their money or investment funds.
There are different methods through which you will be able to identify the best stocks to buy today on your own. A wise stock market investor always conducts comprehensive research on the companies before thinking about investing in them. In this article, we will help you understand how you can determine which stocks to buy.
How to Allocate Your Funds While Picking Best Stocks to Buy?
Investors and shareholders often confuse themselves while picking out the best stocks to buy today. The reason for this confusion is how to allocate your investment funds in order to receive the maximum gains from your investments. To find a possible solution to the asset allocation problem most people take the suggestion of stock brokers, which is not something an ideal investor should do.
Stock brokers won’t be able to provide you with a clear picture all the time, and will mostly use heavy words and jargon to cloud your judgment. Similar things may happen when you ask for investment allocation advice from your friends and families.
Although we recommend you conduct your own research, if you still want investment advice then you should request the same from a seasoned stock market investor and financial planner. The stock market is very dynamic and that is why if you put too much money in one single company stock or sector then you may end up losing your capital very quickly.
The asset allocation approach of every investor may differ according to their investment style, risk-taking ability, and financial goals. Nevertheless, if you are a novice stock market investor then we would recommend you to allocate your investment funds in the following way to get maximum returns from your investment
- Large caps: 50 to 60 percent
- Mid caps: 25 to 30 percent
- Small caps: 5 to 10 percent
How You Can Identify the Best Share to Buy Today
An investor should decide on which company stocks to purchase solely depending on the latest factual information. Using the same information, they will be able to determine if the company is going to give better returns or not.
Therefore, as an investor, you need to have comprehensive knowledge about the company and the entire sector (if possible). Moreover, it is equally important to gather information from a reliable and genuine source. In this section, we will provide you with fundamental information on how to approach the stock market while looking for reliable company information.
Different sources of company information
- Offer documents: One of the best sources of reliable company information is offer documents. You will be able to access lots of important and reliable information regarding a company in its offer documents.
- Annual reports: If you are unable to get hold of the company’s offer documents, then you can check out its annual report. All companies listed in the stock market regularly publish their annual reports every year and it is easily available on the web.
- Company press releases and BSE/NSE announcements: Apart from offer documents and annual reports you can also refer to other official company documents such as announcements, press releases, presentations, etc. which are broadcasted at regular intervals. You will be easily able to find these types of documents on the company’s official website, National Stock Exchange website, and Bombay Stock Exchange website.
- Newspapers and other media platforms: If you want to be updated with daily company information then you can also refer to established newspapers and other media platforms. It is a great way to receive the latest reliable information on different companies and industries.
Moreover, in this digital age, you can also keep yourself updated through different established finance-related social media channels, you can also watch videos uploaded by reputed financial investors, and planners on YouTube or listen to podcasts. All of these sources will provide you with information on the plans, views, and strategies of different companies.
Now that we have understood how to collect reliable information on listed companies in the stock market to help us select the best shares to buy today, we need to focus on other aspects as well. Although it is okay to rely on company information you also need to select the safest investment strategy that can help you gain maximum returns.
Best Investment Strategy You Can Choose for Top Stocks to Buy Today
According to the most successful and richest stock market investor in the world, Warren Buffett, an investor requires two things in order to be successful in the stock market. Firstly, he needs to have a good understanding of the share market and the second thing is to focus on a value investment strategy.
The term value investment was coined by Benjamin Graham, the mentor of Warren Buffett. According to Graham, if you make an investment without evaluating both the current market scenario and the company you have invested in, then your investment is purely speculative.
With the help of a value investment strategy, you can gain tremendous returns from your investment and at the same time, you will also be able to reduce your investment risk. Utilizing this investment strategy, a lot of investors have been extremely successful in the stock market. Not to mention, Warren Buffett himself follows this investment strategy.
Value investing mainly focuses on two interlinked components: fundamental analysis and intrinsic value of company stock. Value investors determine the intrinsic value of company shares through fundamental analysis and if they find an opportunity to purchase the shares of a quality company at a discounted price, they instantly bag that opportunity. The main aim of the investors and shareholders is to hold the company shares until they reach their intrinsic value and then sell them to gain returns for their investment.
It is a long-term investment strategy where the investors ignore the short-term revenues and market fluctuations to receive huge returns. Sometimes value stocks provide the shareholders with returns in multiple folds and that is why sometimes these stocks are regarded as multibagger stocks. All you need to do here is to find out undervalued shares and invest in them because it is truly worth it. The investment strategy is simple yet tremendously effective for investors.
List of Best Company Stocks You Can Buy Today
Here is a list of top stocks to buy today:
|Name||Market Cap (Cr.)||Close price (Rs.)||P/E Ratio||5Y Returns (%)|
|Adani Power Ltd||1,24,946||323.45||12.46||299.25|
|Varun Beverages Ltd||74,825||1151.95||51.99||656.93|
|Tata Consumer Products Ltd||73,313||789.15||68.18||185.22|
|Cholamandalam Investment and Finance Company Ltd||59,218||720.75||25.34||184.04|
|JSW Steel Ltd||1,74,478||726.20||23.25||175.95|
|Tech Mahindra Ltd||1,05,153||1,080.15||18.09||117.63|
|Tata Power Company Ltd||71,608||224.10||28.09||134.88|
|ICICI Bank Ltd||6,48,686||930.30||22.24||198.59|
(Data as of 25th November 2022)
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
- While investing in the stock market, do not rely on insider tips because most of the time they are not reliable.
- Before investing in the stock market you should research the current market conditions and the company you are planning to invest in.
- As an investor, you should properly allocate your investment funds and avoid putting all of your money in the share of a single company.
- Value investing is the best and most proven investment strategy for beginner investors.
Important things to remember:
1. Do Not Blindly Follow Hot Tips
No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly.
2. Eliminate Loser Stocks from Portfolio
There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses.
3. Don't Exceed Your Investment Budget Abruptly
While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares.
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
Which industry will boom in future?
Some of the industries that have been producing good results in the Indian stock in the recent few years and will continue to do so are the retail, textile, fintech, electronic vehicle, and automobile industries. Except for these, the other industries that are going to show promising results in the future are robotics, drones, artificial intelligence, agriculture, and semiconductor.
How do I know which stock to buy?
As an investor, consider the following things when selecting stocks:
- P/E ratio as the valuation indicator
- Past performance and growth trends in the market
- Effectiveness of the company management and leadership
- If the company distributes dividends regularly to its investors
- Debt-to-equity ratio of the company
- Overall performance of the company against its competitors
Can I buy 1 share?
Yes, you are allowed to buy only 1 share of any company as long as your minimum investment is Rs.100.
How do you tell when to purchase a solid stock?
Investors typically find it to be an excellent opportunity to purchase at a discount during the time after any corrections or crashes.
What should I look into before purchasing stock?
Before purchasing, you must acquire the tools to perform stock research. The most current annual report of the firm, quarterly earnings analyses, press announcements, corporate presentations and information, and financial statements are examples of documentation that falls under this category.
Who is the most well-known stock picker?
While various individuals vie for the title of a top stock picker of the contemporary period, The most renowned is often recognized as Warren Buffett.
Can I make a fortune from stocks?
Yes, stock market investments have the potential to make you wealthy. Investing in the stock market is one of the most consistent methods to increase wealth over time.
What exactly are hot stocks?
This demand for a stock typically occurs when investors contemplate an initial public offering (IPO) or simply because the stock routinely beats the market due to outstanding financial results. Hot stocks entice investors because they are in high demand.
What exactly are blue chip stocks?
Blue chip stocks are large, well-established, and financially strong corporations that have been in operation for many years and have consistent earnings.
How can you identify a stock that will increase?
Favourable macroeconomic conditions as well as expectations of robust earnings can help the stock price to increase.
How can beginners purchase stocks?
The most sensible option is to buy stocks online via a stockbroker. You may begin purchasing supplies on the broker's website immediately after creating your account and depositing funds. Another possibility of buying shares is straight from the company or a full-service stockbroker.
How can you locate a reliable stock?
Check for the firm's price-to-earnings ratio, which compares the current share price to earnings per share. The beta of a firm may inform you how risky a stock is compared to the rest of the marketplace. Invest in dividend-paying companies if you wish to put your money to work.
How much money can you make with stocks in a month?
The reward-to-risk ratio of 1.5 is reasonably cautious and reflects the daily stock market opportunities. Earning 5% to 15% or more each month is achievable, but it is not easy, despite what the stats suggest.
How long should I keep stock?
Despite the lack of optimal timing to invest in stocks, you should do it for at least 1-1.5 years.