Kundan Kishore sir is truly a game-changer! It explains SIP investment strategies in such a simple yet powerful way, making market downturns feel like opportunities rather than threats. The Baahubali-Kattappa analogy makes it even more relatable and engaging. I am especially thankful to Kundan Kishore for sharing such valuable insights. Looking forward to more wisdom from you!
Great question! Choosing the right stock for a long-term Systematic Investment Plan (SIP) in equities requires careful selection.
Here’s a structured approach to help you pick a good stock for long-term SIP:
1. Look for Strong Business Fundamentals
Consistent Revenue & Profit Growth: Check if the company has been growing its revenue and profits steadily over the last 5-10 years.
High Return on Equity (ROE) & Return on Capital Employed (ROCE): Look for an ROE above 15% and ROCE above 18%, which indicate strong profitability and efficient capital usage.
Low Debt: Avoid companies with excessive debt. A Debt-to-Equity ratio below 0.5 is usually considered good.
2. Choose Market Leaders in Their Sector
Companies with a dominant market share tend to have better pricing power and stability.
Sectors like Banking (HDFC Bank, ICICI Bank), IT (TCS, Infosys), FMCG (HUL, Nestlé), and Pharma (Sun Pharma, Dr. Reddy's) are known for resilience over the long term.
3. Check Management Quality
Invest in companies with ethical and competent management.
Look for consistent dividend payments and avoid companies involved in frequent corporate governance issues.
4. Evaluate Growth Potential & Industry Trends
Choose businesses in industries with long-term growth potential (e.g., renewable energy, tech, financial services).
Check if the company is adapting to market trends (e.g., digital transformation in IT, electric vehicles in auto).
5. Price Valuation Matters
Even great stocks can be bad investments if bought at high valuations.
Use ratios like PE Ratio, Price-to-Book Value, and PEG Ratio to ensure you’re not overpaying.
6. Diversify but Don’t Overdo It
Investing in 3-5 solid stocks instead of just one helps balance risk and returns.
Alternatively, consider investing via a Bluechip Mutual Fund SIP if you're unsure about stock selection.
7. Stay Invested for the Long Run
SIPs work best when done consistently over 5-10 years, allowing you to benefit from rupee cost averaging and compounding.
Ignore short-term market noise and stay focused on the long-term growth story.
Example of Good Stocks for Long-Term SIP (as of recent trends)
Some popular choices among investors include:
Large Caps: HDFC Bank, TCS, Infosys, Asian Paints, Reliance Industries
Mid Caps: Tata Elxsi, Deepak Nitrite, Mphasis, PI Industries
👉 Final Advice: Always do your own research, track your investments regularly, and make adjustments if needed. If you’re new, consider consulting a financial advisor before committing to individual stock SIPs.
Direct equity SIP would be better to learn and explore. Please guide
Thanks
Investing in MFs, but how to check whether I am investing in right mix of MFs, can you suggest?
My time horizon is 10 years and investing since last 8 years, increasing my monthly SIP value by about 10% every year.
Sir kindly explain how to make own SIP portfolio.
Sure. Let me write the next blog on this topic.
Looking forward thanks
I want to learn SIP in stock
I will write next blog on this topic.
Kundan Kishore sir is truly a game-changer! It explains SIP investment strategies in such a simple yet powerful way, making market downturns feel like opportunities rather than threats. The Baahubali-Kattappa analogy makes it even more relatable and engaging. I am especially thankful to Kundan Kishore for sharing such valuable insights. Looking forward to more wisdom from you!
How can pick a good stock for Long time SIP...?
Great question! Choosing the right stock for a long-term Systematic Investment Plan (SIP) in equities requires careful selection.
Here’s a structured approach to help you pick a good stock for long-term SIP:
1. Look for Strong Business Fundamentals
Consistent Revenue & Profit Growth: Check if the company has been growing its revenue and profits steadily over the last 5-10 years.
High Return on Equity (ROE) & Return on Capital Employed (ROCE): Look for an ROE above 15% and ROCE above 18%, which indicate strong profitability and efficient capital usage.
Low Debt: Avoid companies with excessive debt. A Debt-to-Equity ratio below 0.5 is usually considered good.
2. Choose Market Leaders in Their Sector
Companies with a dominant market share tend to have better pricing power and stability.
Sectors like Banking (HDFC Bank, ICICI Bank), IT (TCS, Infosys), FMCG (HUL, Nestlé), and Pharma (Sun Pharma, Dr. Reddy's) are known for resilience over the long term.
3. Check Management Quality
Invest in companies with ethical and competent management.
Look for consistent dividend payments and avoid companies involved in frequent corporate governance issues.
4. Evaluate Growth Potential & Industry Trends
Choose businesses in industries with long-term growth potential (e.g., renewable energy, tech, financial services).
Check if the company is adapting to market trends (e.g., digital transformation in IT, electric vehicles in auto).
5. Price Valuation Matters
Even great stocks can be bad investments if bought at high valuations.
Use ratios like PE Ratio, Price-to-Book Value, and PEG Ratio to ensure you’re not overpaying.
6. Diversify but Don’t Overdo It
Investing in 3-5 solid stocks instead of just one helps balance risk and returns.
Alternatively, consider investing via a Bluechip Mutual Fund SIP if you're unsure about stock selection.
7. Stay Invested for the Long Run
SIPs work best when done consistently over 5-10 years, allowing you to benefit from rupee cost averaging and compounding.
Ignore short-term market noise and stay focused on the long-term growth story.
Example of Good Stocks for Long-Term SIP (as of recent trends)
Some popular choices among investors include:
Large Caps: HDFC Bank, TCS, Infosys, Asian Paints, Reliance Industries
Mid Caps: Tata Elxsi, Deepak Nitrite, Mphasis, PI Industries
👉 Final Advice: Always do your own research, track your investments regularly, and make adjustments if needed. If you’re new, consider consulting a financial advisor before committing to individual stock SIPs.
Hope this helps! 🚀 Happy Investing!
Thanks for ur valuable reply .