There are many types of Investment Type
But Investment in Stocks over long period of time gives highest return and provides any time liquidity option which is usually not available in real estate.
But better Return the big question is selection of stock which has potential of growth and turn into multibagger. In this article we’ll see most reliable method of stock selection in easier way without looking into its Fundamental and Technical analysis.
- Divide your investment in Half- Half
To minimize the risk we need to divide our capital in two parts half for large cap stocks and other half for Mid/small Cap stocks
- Half for Mid cap stock & Half for Large Cap Stock
Investment in large Cap companies has less risk but returns are also less than Mid Cap
Returns Means here risk and Returns are directly proportional. So put half in large cap
And other half in mid/small cap companies
- Open Moneycontrol.com
Money control website is really one of best website for Market watch. Which have very big data base of stocks which having all information about mutual fund also etc.
- Go to Mutual Fund
Click on mutual Fund Tab in upper menu bar. Shown in image below
- Select Mid cap Funds
There is all types of mutual funds are there like large cap, small cap, diversified etc. to select best stock in mid cap segment we will choose mid cap mutual fund.
- Open top 3 scheme of segment based on yearly return
On the basis of yearly return there is top mutual funds listed there in decreasing order.
We can choose as many MF to filter out best stock but here I am going to open top three MF
- Click on Holding of selected mutual fund Scheme
In the bottom of MF page there is holding option click on this. It will show us portfolio of that MF.
- Open shareholding of other 2 mutual funds.
Follow same process for other 2 MF, open their holdings too.
- Find common stock in all 3 mutual funds
Search most repeated stock in all MF or common in most of MF. Make list of them. You can open as many scheme and find most common stock in most of scheme. copy each MFs stock in excel sheet and color them different colours.
then add one extra colomn side of stock name. and put formula in against first share name “=COUNTIF(A:A,A3)”.
then we will find which stock how may times repeted in list then filter out highest no of repated stock.
- Then Open That Stock and check Mutual fund holding (FM Holding).
Now time to check those stocks which are most common, open those stock in moneycotrol, and in bottom of that stock page there is option called ‘MF Holding’ click it.
- And check how many fund having that stock in their portfolio.
Then you will find that how many other MF are also havis this stock in their portfolio and since from?
- And also check holding are increasing or decreasing
Check quarter wise share count increasing or decreasing for most of MF in that stock.
- If holdings are decreasing then don’t choose this stock
If you find that in every quarter there is increase in share count holding in FMs for that stock. Then it show that experts are also having interest in that stock so keep that stock in your final list. And if you found that share counts are decreasing in most of MF than don’t choose it and follow same process for other common stock in most of funds.
- Follow same process to choose large cap stocks
Till point 13 we are searching for mid cap stock so follow same process from point 3 to point 13 for large cap stock.
Fund managers of MFs are processionals who having many years of experience in market So you are following expert portfolio that’s why this way of stock selection is very easier and trustful