How to invest in shares

We do not give stock recommendations. However, this is a good time to invest in equity with a long investment horizon. We are in a secular long term bull market and the recent correction of nearly 1000 points on the Nifty presents good buying opportunity. While the market has corrected significantly, there is a possibility that the market may correct a few hundred points further. If you want to take advantage of further correction, you can buy on dip every time the market corrects over the next one or two months. Since you have a 3 – 4 year investment horizon, you should invest in good companies in the cyclical sectors like banks, automobile and auto ancillaries, capital goods etc. You can also invest in the infrastructure sector, but you should wait to see signs of recovery in this sector in terms of new projects taking off. To diversify your risks, you can also invest in good companies in the pharmaceutical sector. Unless you have stock picking and research expertise, you should avoid midcap companies and stick to large cap companies with good balance sheet (i.e. strong revenue growth, EPS growth, healthy debt equity ratio etc). You should note that this fiscal year will be highly volatile in terms of share prices. However, since you have a 3 – 4 year horizon, you should be patient and stick to your conviction.