Best Long-Term Stocks to Invest

As we approach 2024, investors are constantly seeking chances to build a strong and varied portfolio that can withstand market swings and produce stable results over the long run.

Long term investing is a proven approach that allows investors to capitalize on the power of increasing returns and benefit from the growth potential of well-established companies. In this piece, we will explore the top long term stocks to consider for your investment portfolio in 2024, giving an in-depth study of their performance, growth prospects, and key factors that make them ideal long-term investments.

What are stocks to buy in the long term?

Best long term stocks usually have a proven track record of steady growth, firm foundations, and durability in different economic cycles. These stocks are often linked with established companies working in safe or rising industries, giving investors the potential for capital growth and, in some cases, regular income payouts over an extended time.

Investing in long-term stocks takes patience, focus, and a complete understanding of the company's business plan, competitive environment, and growth prospects. These stocks are usually less unpredictable than their shorter-term peers, backed by good financials and a proven ability to handle market ups and downs.

Top 10 Stocks to Buy for Long Term

Overview of Top 10 Stocks to Buy for Long Term

Reliance Industries Limited (RIL)

As of 22 October 2024, Reliance Industries is the largest stock in the Indian market, with a market capitalization of ₹18,46,671 crore. Headquartered in India, it’s a major conglomerate involved in various sectors including oil and chemicals, oil and gas, retail, digital services and financial services. Under the leadership of Mukesh Ambani, Reliance Industries has significantly impacted India’s telecommunications industry through Reliance Jio Infocomm and is also expanding rapidly through its retail division, Reliance Retail. Given its diverse operations and growth, Reliance Industries is considered one of the top long term stocks to buy.

Tata Consultancy Services (TCS)

Tata Consultancy Services Ltd (TCS) is the second largest stock in India by market capitalization, valued at ₹14,71,151 crore. TCS is a leading Indian IT services company known globally for its technology solutions and digital services. It’s recognized for its reliability and excellence, serving clients across many industries worldwide. With a strong focus on innovation, advanced technology and customer satisfaction, TCS is a solid choice for long term investors looking for stability and growth in the IT sector.

Infosys Limited

Following TCS, Infosys is India’s second largest IT company. It is a global leader in consulting, technology and digital services. As of 22 October 2024, Infosys has a market capitalization of ₹7,72,548 crore. The company focuses on digital transformation and innovative solutions, helping various industries go digital. With its strong financial performance and global reach, Infosys is a strong choice for long term investment in the digital services and consulting sectors.

HDFC Bank

HDFC Bank is one of the top stocks in India by market capitalization, valued at ₹13,18,446 crore as of 22 October 2024. Based in India, HDFC Bank is a major player in the banking sector offering a wide range of services to both individual and business clients. Its extensive branch network and strong financial performance make it a reliable choice for investors.

ITC Limited

ITC Limited founded in 1910, is a major Indian conglomerate with a market capitalization of ₹6,05,430 crore as of 22 October 2024. It is well known for its strong brand presence and recognition. ITC primarily operates in the FMCG sector with popular brands like Aashirvaad, Sunfeast, Bingo and Classmate. The company has a robust delivery network and a deep understanding of customer preferences which helps it maintain its market position.

Beyond FMCG, ITC has expanded into hotels, paperboards, and agri-business. This diversification reduces the company's dependence on any single sector and helps it manage risks from downturns in specific industries.

Hindustan Unilever Limited

Founded in 1933, Hindustan Unilever Limited or HUL is one of India's leading fast moving consumer goods (FMCG) companies. As of 22 October 2024, it has a market capitalization of over ₹6,34,495 crore. The company's product portfolio includes well-known brands across categories such as personal care, home care, foods, and beverages. HUL's strong distribution network and focus on innovation contribute to its long-term growth potential, making it an attractive option for investors.

Asian Paints

Asian Paints is India's largest paint company and has a significant market share in the decorative paint segment. With a market capitalization of ₹2,90,637 crore as of 22 October 2024, it has established itself as a leader in the industry. Asian Paints’ strong brand equity and distribution network make it a consistent performer in terms of sales and profitability.

Bharti Airtel

Bharti Airtel, founded in 1995, is one of India's leading telecommunications companies. With a market capitalization of ₹10,15,565 crore as of 22 October 2024, it has a substantial customer base and offers a variety of services including mobile and broadband. With the growing demand for internet services, Bharti Airtel is well-positioned for future growth.

Maruti Suzuki India Limited

Maruti Suzuki is India’s largest car manufacturer, with a market capitalization of ₹3,74,507 crore as of 22 October 2024. Maruti Suzuki has built a strong brand presence and extensive distribution network in India. With a diverse product lineup, the company is set to capitalize on the growing demand for personal mobility in the country.

Avenue Supermarts

Avenue Supermarts is the parent company of D-Mart, one of India's leading retail chains. The company's market capitalization stands at ₹2,61,058 crore as of 22 October 2024. Avenue Supermarts has a strong business model focused on delivering quality products at affordable prices, making it a popular choice among consumers. Its rapid expansion plans indicate potential for future growth.

Advantages of Long Term Investment Stocks

Now you understand what are the best stocks to buy today India for long term. Now let's cover its advantages.

Investing in stocks with a long-term perspective offers numerous benefits that can significantly enhance wealth over time. Here’s a look at the key advantages of long-term investment in stocks.

● Compounding Growth: Long-term investments benefit from compounding, where returns are reinvested, leading to exponential growth over time. The longer you stay invested, the more powerful compounding becomes.

● Lower Risk from Market Volatility: While short-term investments are prone to market fluctuations, long-term investments help ride out volatility. Over time, the impact of short-term market dips reduces, leading to potentially stable returns.

● Reduced Transaction Costs: Frequent buying and selling involve higher transaction costs like brokerage fees and taxes. Long-term investments minimize these costs, enhancing overall returns.

● Tax Benefits: In many regions, long-term capital gains are taxed at a lower rate compared to short-term gains, leading to better post-tax returns.

● Better Alignment with Financial Goals: Long-term investments are ideal for achieving significant financial goals like retirement, children’s education, or buying a home. They align well with wealth-building strategies.

● Focus on Fundamentals: Long-term investors focus on a company’s fundamentals rather than short-term market noise, leading to more informed and potentially profitable decisions.

● Dividend Income: Many long-term stocks offer regular dividends, providing an additional income stream alongside capital appreciation.

These advantages make long-term investments a key strategy for wealth creation and financial stability.

Risks of Investing in Long Term Investment Stocks

While long term investments can offer significant returns, they come with some challenges:

1. Volatility: Stock prices can be unpredictable. Even the best long term share can fluctuate due to market changes, economic factors or company news.

2. Lack of Liquidity: Investing in long term stocks means your money is tied up, making it hard to access quickly if needed. If you need immediate access to your funds, long term stocks might not be the best choice.

3. Company Specific Risks: Putting money into one company’s stock exposes you to risks related to that company such as poor management, legal troubles or market competition. Even the best long term investments can be affected by these issues.

How to Invest in Stocks for Long Term?

Best stocks to buy today long term can be done in several ways including buying individual stocks, mutual funds and exchange traded funds (ETFs). Here’s a simplified guide to investing in long-term stocks in India:

1. Open a Demat Account: To start investing you'll need to open a Demat account. You can open a Demat account with 5paisa.

2. Research Stocks: Thoroughly research potential long term stocks. Use tools like the Stocks Screener to analyze past performance, fundamentals, financials and find stocks that fit your investment goals.

3. Buy Stocks: Once you’ve identified the stocks you want to invest in, place a Buy order through your brokerage account.

4. Monitor Your Investments: Keep an eye on your investments regularly to ensure they align with your financial goals and adjust if needed.

By following these steps, you can choose long term stocks that match your investment strategy and risk tolerance. Whether you prefer picking individual stocks or investing through mutual funds and ETFs, make sure your choices align with your overall financial plan.

Why Should You Buy Indian Stocks for the Long Term?

● Chance for returns to grow over an extended length of time
● Chance to gain from India's long-term economic growth
● Diversification between different businesses and areas
● Access to companies that have been around for a while and have a good track record
● Chance to get monthly dividend income (if you own stocks that pay dividends)
● Being able to handle short-term market changes

Investing in long-term stocks in India allows buyers to share in the country's growth story. India's beneficial demographics, growing middle class, and rising spending levels create a suitable atmosphere for businesses in various fields to thrive. By buying these long-term stocks in 2024, buyers can take advantage of India's economic potential and benefit from the effects of steady returns.

Who Should Invest in Long Term Stocks in India?

Investing in long-term stocks in India is well-suited for individuals who prioritize patience and discipline in their wealth-building journey and aim to achieve key financial milestones like retirement, children’s education, or purchasing a home. This approach is particularly beneficial for those willing to endure market volatility and remain invested for a period of five to ten years or more, thereby maximizing the benefits of compounding returns over time.

Long-term investing appeals to those who prefer a more hands-off strategy, focusing on a company’s fundamentals, growth potential, and long-term value rather than reacting to short-term market movements. Investors who have confidence in the future growth of the Indian economy and believe in the potential of key sectors such as technology, banking, consumer goods, and infrastructure will find long-term stocks aligned with their financial goals.

Additionally, long-term investments are advantageous for those looking to create a diversified portfolio while minimizing the transaction costs and tax liabilities associated with frequent trading. This strategy is also ideal for those seeking stable returns through dividends along with gradual capital appreciation.

In conclusion, long-term stocks are best suited for individuals with defined financial goals, the resilience to navigate market ups and downs, and a focus on steadily growing their wealth through the power of compounding.

Tips & Strategies to Select the Best Stock for Long Term Investment

To find the best long term stocks to invest in consider these strategies:

1. Don’t Follow Tips Blindly: Avoid acting on stock tips without doing your own research. Even if a tip seems credible, thoroughly analyze the stock before making a decision. Some tips can lead to great gains but others might result in losses.

2. Remove Poor Performers: If a stock has been underperforming, don’t assume it will always improve. Be realistic about its future prospects and consider selling it if it’s not meeting your expectations. Removing weak stocks can help prevent further losses and improve your portfolio’s overall performance.

3. Manage Your Investment Budget: Stick to your budget when investing. Rather than putting all your money into one stock, spread it across several high performing stocks. This diversification helps protect you from risks and supports better longterm growth.

4. Follow a Strategy: Develop and adhere to a clear investment strategy that aligns with your goals. Perform thorough research using fundamental and technical analysis and use tools like stock screeners to make informed decisions. A disciplined approach will improve your chances of selecting strong long-term investments.

By using these strategies, you can make smarter investment choices and build a portfolio that supports long term growth.

Factors to think about before buying stocks in India to hold for a long time

● Basics about the company (finances, management, and the market)
● Industry growth hopes and trends
● Valuation measures (P/E, P/B, payout return)
● Risk appetite and business goals
● Portfolio diversity and asset allocation
● Macroeconomic forces (interest rates, inflation, government measures)

When considering long-term stock purchases, conducting a detailed study and analysis of the company's basics is essential. This includes analyzing its financial success, management quality, competition standing, and growth possibilities within its business. Additionally, buyers should consider value measures, such as price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and dividend yield, to ensure that the stock is reasonably priced and offers potential for future growth.

Furthermore, buyers should measure their risk tolerance and financial goals to determine the proper mix of long-term stocks to buy within their total portfolio. Diversification across sectors and businesses can reduce risks and provide exposure to different growth possibilities.

It is also essential to consider macroeconomic factors, such as interest rates, inflation, and government policies, as they can affect the success of specific businesses and the general market.

Conclusion

In conclusion, long-term investing is a powerful strategy that can help you build wealth over time. The stocks mentioned above represent some of the best long-term investments available in 2024, each with its own unique strengths and growth potential. Conduct thorough research and analysis, consider your investment goals, and consult with a financial advisor before making investment decisions.