21 Sock SIP Ideas for DIY Investors to Beat Market Volatility
Swing traders are taking opportunity while every dip in the market is eventually getting bought accompanied by a round of profit making. The current market volatility offers enough room for long-term and medium-term investors to pick quality stocks in a staggered manner with the help of systematic investment plans, or SIPs.
The SIP concept may work equally well even for direct equity investors as it does in the mutual fund industry. You can simply buy your favourite stocks in smaller quantities but at regular intervals in DIY (do it yourself) style.
This strategy, also known as rupee cost averaging, will help you average your cost of purchase and make the best of a volatile market. You can benefit from any future falls and also have a better margin of safety.
“A stock SIP is a superior way to invest systematically. It enables investors to buy stocks (amount/quantity based), periodically (weekly, monthly, etc.) in a systematic manner. It is the ideal method of investing for long term investors. It helps you make the best of the unpredictable market by adopting a disciplined investment strategy," HDFC Securities said in a report.
The brokerage has released a set of 21 stock ideas from across sectors and market-caps that investors with a long-term horizon can buy systematically over the next few years.
- 12 large caps suggested by Analysts at HDFC Securities for SIP investors are Reliance Industries (RIL), Infosys, Hindustan Unilever (HUL), State Bank of India (SBI), ICICI Bank, ITC, Larsen and Toubro (L&T), Sun Pharma, HDFC Life Insurance, Bajaj Auto, Dabur India and Tata Motors.
- Other Analysts are biased towards M&M, Dr Reddy's Lab, GAIL, Aurobindo Pharma, NMDC, ACC, HPCL, Tata Power and Birla Corporation.
“We like Dr Reddy’s on account of widely distributed revenue mix, strong focus on domestic business, injectables pipeline for US and EU, healthy balance sheet and return ratios, and resolution of all major US FDA issues," said the report that featured two other pharma stocks.
ACC and Birla Corp are two cement stocks on the list. “ACC has a debt-free balance sheet with a strong cash position despite on-going capex. Also, it has a strong cash flow from operating activities. Working capital days are expected to remain stable which will again help the company to maintain balance sheet strength," the report said.
Although the benchmark Nifty has gained just about 5% so far in 2021, the Midcap Index has shot up over 18 per cent and Nifty Smallcap Index by 22 per cent.