In 2008 at the height of the global economic crisis, investors who had very little knowledge on stocks went berserk buying into stocks and ended-up with huge losses. Since than, some of them have never recovered and no longer invest in stocks.
We suggest that newcomers should buy into quality stocks with strong businesses, to build investing confidence. Here are a few shares that those new to investing can buy.
A new bank today may not be able to build a franchisee like ICICI Bank, which has near 4500 branches across the country. Its shareholding in subsidiaries like ICICI Prudential and others itself is almost worth Rs 35,000 crores.
The share prices has almost doubled in the last 5 years. At Rs 262, the shares are slightly expensive. If you get the share around the Rs 230 levels it could be a good pick.
This is a company that owns ITC Hotels, makes paper boards, makes Wills Cigarettes and also owns FMCG brands like Sunfeast, Vivel, Ashirwad, Bingo and even a stationery brand like 'Classmate'.
For those new to investing, it is a solid company to invest in with solid brands. Like ICICI Bank, the stock has doubled in the last 5 years. Could be a good bet at around Rs 330 levels.
SUN TV Network
This company runs the Sun range of channels and has a dominant share in the South Indian markets. Again a great business to own.
The shares have given a whopping returns of almost 25 per cent each year in the last 5 years. There is scope for future returns and new investors can buy into the company.
Larsen and Toubro
Again this is a share that has given superb returns in the last 5 years and its a great business to own.
The company has a dominant share in every business including engineering construction, infotech, real estate and finance. We believe that should the markets fall , investors would not burn their fingers too much in the shares.
This is a monopoly business with Coal India having the finest coal blocks. The company is a debt free, cash rich company, which gives a dividend yield of almost 3 per cent. Again, we see little risks for new investors in this stock.
Axis Bank, like ICICI Bank has a very solid network. However, in terms of non performing assets, the company's performance has been much better than ICICI Bank.
The stock has rallied in the last few months. So, you should buy it only on dips and not at the current prices.
NMDC like Coal India is a cash rich divided paying company.
In fact, the dividend yields for the stock is a cool 8 per cent, which is more than bank interest rates. We suggest buying the stocks closer to the Rs 90 levels for higher dividend yields.