Investing is widely recognized as one of the most effective methods for creating wealth when carried out properly, it is also capable of producing very satisfying returns over a period of time however there are a number of considerations that a prudent investor must always keep into consideration. Many people who have money invested do some soul-searching as the year draws to a close to determine how successful their investments were. 2022 was particularly challenging for both large and small investors alike as financial markets were highly volatile and rough all throughout the year due to rising inflation, a slew of interest rate hikes in US and domestic markets, and geo-political tensions between Russia and Ukraine. While it's possible in fact we are quite sure that 2023 will be better in terms of generating wealth. Here are some investment goals and tips or golden rules to keep in mind to make the most of your investment in equities
Portfolio Rebalancing or diversification
Great investors like Warren Buffet, Benjamin Graham , Peter Lynch or Late Rakesh Jhunjhunwala follows a simple and most successful principle that is Portfolio Diversification. In business world there is a common proverb that doesn’t risk everything on a single venture. This is also relevant and very useful for investment community. If you're an investor, you need to spread your hard earned money across a wide range of asset types and industries. If you are primarily a stock investor, your portfolio must be comprised of different vertical of stocks and not put all your eggs in one basket. Investing wisely and reducing exposure to risk is made easier through diversification. Since not all industries or asset classes are created equal, diversifying your holdings can help you weather the storms of market uncertainty.
Financial markets are often uncertain. The SIP method is highly recommended as a viable and trusted investment strategy. An investor can set up a Systematic Investment Plan (SIP) i.e. weekly, fortnightly, monthly, or quarterly to invest a set amount of money on a regular basis. This kind of approach often tackles the market uncertainty. The lowest minimum investment of Rs 500 required by SIP means that even those with limited resources can participate. Any time the SIP is paused, resumed, or terminated, the amount can be changed. An investor also gains from the lowering of their cost-average price and the compounding of their returns. Investments through the SIP can begin in 2023 through our stock baskets. It will help you feel less stressed while also improving your risk management.
Do your own research
Any investment approach requires combination of Art and Science. If you want to make money in the stock market, you need to develop your own strategy. When developing their own investment strategies and methods, investors can draw from a wide variety of resources and perspectives. Perform an analysis of the company's fundamentals, its business model, its management, or its quantitative aspects, such as its earnings ratio, cash flow, etc. Before any investment you can ask yourself 2 basic questions- what to buy and when to buy. What to buy can be answered by following fundamental approach while when to buy can be answered by –Technical analysis. The best way to generate wealth in 2023 is to take the combination of these two approaches.
If you're an investor, you don't need a strict system, but you do need to define and stick to some standards. The conditions for entering or leaving a trade, the time range, averaging, etc. can all be governed by rules. Establishing and sticking to your principles for investing in 2023 can help you become a more disciplined trader/Investor. Above all following strict and discipline approach helps you to overcome your anxiety levels as well as the suppression of greed and fear.
Take the help of an expert
Financial experts can be useful for both novice and experienced investors as well as for traders also. Growing inflation and unknown international events may keep market fluctuations high over the coming year. If you lack the skills to invest wisely or you don’t have the time to read and study, consulting with a Investment expert is a good option to consider. Investing in 2023 might be easier if you use a portfolio management plan, sip or consult with investment professional who can steer you in the right direction.
10 Golden rules for traders
- Strategy: What's your game plan? Be very clear in your approach. Evaluate regularly about your direction and positions so that mistakes can be identified at early stage.
- Take calculated risk: You shouldn't put all your eggs in one basket because it's quite unlikely that you'll always make the appropriate trading decisions. The point is you don’t know the velocity of storm and continue trading through it, so set some money aside. When profitable, expand; otherwise, cut down as simple as that
- Don't just trade to trade; Trade because you believe in it or fear of missing out. It may be wiser to search alternative options or do nothing at all if conditions doesn’t suits you
- Acceptance: Think and evaluate the conditions very carefully. You won’t get many chances to generate profits and one single mistake will ruined your capital. So plan B should be always in the back of your mind.
- Carry profits only: Instead of trying to recoup losses, focus on maximizing gains from any profitable trades. Bad trades are getting worse in absence of any action. Round off immediately as loss recovery requires considerably more effort.
- Say no to emotions: Always keep your mind above from your heart feeling. 90% of losses arise due to your emotions. Strictly Follow the rules, focused approach and keep your emotions under control while trading.
- Use stop loss strictly: Controlling losing trades through stop loss is as essential as safeguarding winning ones. Therefore any trade should be covered by stop loss.
- Record your transactions: Keep track of your successes and failures so that you can learn from them and avoid making the same mistakes again. Also don’t let the confirmation bias heavily. Don’t be too over confident or too depressed. Always keep your feet on the ground.
- Trend is your friend: Don't try to fight the trend or in a opposite direction; doing so is like trying to grab a falling knife. It's possible although it usually ends in injury. It's often less difficult to just go with the flow. Also stick to your basics first.
- Reward is greater than risk: Whether you are trading in equities or commodities or any other investment class always remembers the risk reward ratio. Always look out the opportunities that have double the reward as compare to the risk.
Here are the best stocks to buy in 2023
- ACC and Ambuja cement Limited- After Adani group's announcement that it will purchase ACC Ltd. and Ambuja Cement, scrip become the hot favorite. The company grew rapidly through various mergers and acquisitions, eventually becoming India's second-largest cement manufacturer. Since the acquisition, ACC's stock price has performing steadily. There is room for the stock price to rise, possibly to the range of Rs 3000-3100.
- HDFC Life Insurance- Exide Life Insurance and HDFC Life Insurance have been approved for a merger by the National Company Law Tribunal (NCLT), making them the next favorite on the list of the top 10 stocks to invest in. The parent company of Exide Industries, Exide Industries Limited, sold its whole stake in Exide Life Insurance to HDFC Life for Rs. 726 Cr. in cash, based on an issue price of Rs. 685, for a total of Rs. 6,687 crore. In 2023, the price of the stock could reach to Rs. 730.
- Adani Power- Adani Group has made it publically that expanding through acquisitions and investments in fast-growing sectors like cement and energy is in priority to its plans for future growth. Adani Group already declared that it will no longer seek to delist Adani power due to a lack of stock exchange approval. The stock's Strong performance reflects its consistent financial performance and the quality of its management. There will likely be increased action in 2023 and share prices may rise up to Rs 455.
- Hero MotoCorp: In addition to being India's largest producer of two-wheeled vehicles, the company has also started working on electric vehicles. Very soon its first Vida-branded product is going to launch. The premier two-wheeler manufacturer recently invited its dealers, investors, and worldwide distributors to an event in Jaipur, Rajasthan related to this launch. Considering this, it is quite reasonable to expect the share price to touch Rs. 3300 in the near future.
- Maruti Suzuki:- The company has earned a stellar name in India for providing customers with top-notch automobiles. Maruti has made some quality enhancements from last 2 years and is making efforts to have their vehicles comply with international safety standards. The company is expanding its manufacturing capacity and growing at a healthy rate. We expect share can rise up to 9800 in 2023.
- Oil and Natural Gas Corporation- As an integrated Oil & Gas Corporate, ONGC is responsible for all stages of the oil and gas value chain, from seismic data gathering and interpretation to drilling, work-over, and well stimulation operations to engineering and construction to production, processing, refining, transportation, marketing, applied research and development, and employee training. Mangalore Refinery and Petrochemicals Limited (MRPL), a wholly owned subsidiary of ONGC, is classified as a schedule 'A' Miniratna, Central Public Sector Enterprise (CPSE) by the Ministry of Petroleum & Natural Gas. In the upcoming months ONGC is able to explore more crude in KG basin so we believe there is room for the stock to rise, and it might reach Rs 210 in price by the end of the year.
- TATA Consumer- Tata Consumer Products is the consolidated food and drink business of the Tata conglomerate. Key brands including Tata Tea, Tetley, Tata Salt, and Tata Sampann are all produced there. It has an unrivalled capacity to utilise the Tata brand in consumer items, with a
combined reach of more than 201 million households in India. Tata Starbucks Limited is the name of the company's joint venture with Starbucks for the ownership and management of Starbucks cafes in India. This 50/50 JV has spread to 26 cities since its flagship store opened in Mumbai in October 2012, and many more Starbucks locations are planned throughout the country. Tata Consumer Products has increased its visibility in the international market by concentrating on the United Kingdom, the United States, and Canada. The three most important tea brands we sell in these countries are Tetley, Good Earth, and Teapigs. For the upcoming year we expect share price may rise to 865.
- TATA Elxsi- With the use of design thinking and cutting-edge digital technologies like the IoT (Internet of Things), Cloud, Mobility, VR/AR, and AI, Tata Elxsi assists its clients in reimagining their products and services. Tata Elxsi operates in more than 35 locations across 15 different nations. It offers services in digital engineering, technology development, testing, and systems integration, all with a focus on Design. Over the course of its 30-year history, it has developed cutting-edge technologies and products that have helped numerous well-known companies throughout the world achieve market dominance. Tata Elxsi is a market leader in the industries it has focused on, which include Communications & Media, Healthcare & Pharmaceuticals, and Transportation. In 2023 we expect some tremendous upside in share price and share may touch Rs 7600.
- ASIAN PAINT- Paint manufacturer Asian Paints Ltd is an Indian multinational headquartered in Mumbai, Maharashtra, India. The company produces and distributes paints, coatings, home-decor items, bathroom fixtures, and related services. The Asian Paints company is the largest paint manufacturer in India and the second largest in all of Asia. Berger International is a subsidiary of Asian Paints. The corporation has a significant presence in the Indian subcontinent and the Middle East, where it operates manufacturing facilities in addition to its other 15 countries of operation. A total of Rs 8553.04 crore was reported as the company's consolidated income for the three months ending September 30, 2022, down 1.76 percent from the previous quarter's total income of Rs 8705.91 crore but up 18.23 percent from the same quarter a year earlier. The company's net profit in the most recent quarter was Rs 781.74 billion. Hence performance looks promising and we may expect Rs3560 could be nearby levels.
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