Skip to main content

How to choose the best stock for investment?

Stock options look lucrative because they promise huge-huge return but investors have their limitations and it isn’t possible for an investor to invest in every option. A careful selection of options and the wise comparison is needed before choosing a holding.

Here’re six rules of choosing a better stock option

Rule One: Invest in the company that has an easy-to-understand business model. For example take McDonalds and Starbucks. If you have good understanding of a business than others, it is an edge that you can leverage for your personal gains. Another example of sustainable business is Coca Cola that is considered a trusted investment.

Rule Two: Stick to the “best in breed” companies. Here you need understanding the difference between a brand and best-in-breed business. Brand is more a word for retailing than investment. For example branding has no place in mining sector but it rules retail market. There are some sectors where brands don’t exist but it doesn’t mean that these businesses are unreliable.

Rule Three: The old saying that “past performance doesn’t reflect future results” could be misleading. While it is true that any business could start growing any time but would you want to invest in the company or organization that has lost the trust of shareholders. You should keep past performance of companies in mind when calculating their future growth.

Rule Four: While it could be a little bit difficult but it is better to avoid small-cap stocks. Your first preference should be for large and mid-cap holdings. These firms are called “best of breed” and they have more chances of growing than small-cap companies. This very tip is from the investment school of Benjamin Graham and Buffett.

Rule Five: Take interest in the businesses that pay out rich dividends to their stockholders. Now you can think of investing in Google as it is the largest and most popular search engine but you will feel discouraged on knowing that Google doesn’t give rich dividends but it doesn’t undermine its value of high investment stock. As a rule, you should make sure that a majority of your portfolio investment companies give rich dividends.

Rule Six: It is advised that investors should buy stocks on breakouts. But the modern saying is that you should try buying high stocks at the cheapest price or before the holdings go out of your reach. Sticking to growing companies at earliest is a guarantee to get high return on your investment.


  1. Nice blog. Thanks for sharing this useful information about Stock Market. I want to give suggestion If any investor want to take advice in share market, So they can trust on Ripples Advisory. They will provide you best advice. You can take 2 days free trial for Stock Market Tips. If you want then you can give a missed call @9644405056 or click here>>

  2. Buying, Selling or Hold in a Share are very-very personal decisions
    get best intraday Stock Tips


Post a Comment

Popular posts from this blog

Nifty could slip towards 9,900; 3 stocks which could give up to 11% return

A close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

The Nifty index Futures continued to slide lower for the second month in a row making it 10 percent decline from the record highs. Further, it has broken down from a broadening wedge pattern along with a close below the 200-DMA, affirming weakness dominant in the markets at the moment.

A sustained trade below 10,050 can accelerate the fall to levels of 9,930-9,700. However, a close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

Moreover, the relative strength index or the RSI has turned down from the neutral levels of 50 on two occasions in recent pullbacks suggesting further weakness in the coming trading sessions.

Here is the list of stocks which can give up to 11 percent return:

Arvind Ltd: SELL| Target Rs345| Stop Loss Rs410| Return 11%

On the weekly chart, Arv…

Market Update: PSU bank index outperforms as PNB, Syndicate Bank jump 2-5%; JP Associates zooms 11%

The market breadth was in favour of the advances with 957 stocks advancing while 668 declined and 383 remained unchanged. On the other hand, in the BSE, 1176 stocks advanced and 888 declined and 108 remained unchanged.

The Indian markets on Friday morning were trading flat with the Nifty shedding 51 points or 0.49 percent  while the Sensex was down 178 points.

The Nifty PSU banking index was up 0.6 percent led by stocks like Syndicate Bank which jumped 5 percent followed by Allahabad Bank which gained over 3 percent. IDBI Bank and OBC were the other gainers. PNB gained 2.38 percent.

The top Nifty gainers included Mahindra & Mahindra and Aurobindo Pharma which were up 1.7 percent each followed by UPL, Yes Bank and Zee Entertainment.

The top Nifty losers included IOC and BPCL which fell 2 percent each followed by HPCL, Tata Motors and NTPC.

The most active Nifty stocks included IDBI bank which jumped over 3 percent while JP Associates zoomed over 10 percent after Rakesh Jhunjhunwala…

HDFC Sec retains sell on Bharti Infratel, reduces target to Rs 310 despite 22% fall in last 2 months

The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

Bharti Infratel shares declined 1.5 percent to close at Rs 368 on Tuesday after HDFC Securities has reiterated its Sell rating on the stock with revised target price at Rs 310 (from Rs 387 per share) despite sharp fall in last two months. INDIAN STOCK TIPS

The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

"Target price is based on 20x Dec-19E EPS (Rs 356) for business as usual (versus 24x earlier) less impact of Rs 60 per share from Vodafone-Idea merger (versus Rs 39 per share earlier) and likely acquisition of Vodafone-Idea stake in Indus at enterprise value of Rs 50 lakh per tower (+Rs 15 per share)," the research house said.

It further said the key reason for the de-rating is instant loss of tenancies on merger of Vodafone-Idea and impact of Reliance Communications and Aircel businesses’ scaling down.

This would push back Bharti Infrat…