Long-term strategy in volatile markets: three stocks on the radar
Subscribe to enjoy similar stories. The volatility in the stock market can be your best friend. The swinging markets offer a plethora of great long-term opportunities.
By carefully analysing stocks, you can find undervalued companies poised for growth. Remember, investing in stocks comes with inherent risk. If you don't like taking on too much risk, then long term stocks are your best bet.
These companies typically boast stable financials and deliver consistent returns, acting as the backbone of a healthy portfolio. At Equitymaster, we always favour long-term investing. We strongly believe that long-term investing in fundamentally strong stocks can potentially maximise returns while keeping risk under control.
The stock market rewards those who successfully apply the rules of long-term investing. It also allows an investor to sleep peacefully at night knowing they don't have to constantly check the stock price. In this editorial, we cover three fundamentally strong stocks with low or zero debt, strong cash generation, healthy return ratios (ROE/ROCE) and strong growth plans.
Read on… The bank relies on a model of a wide franchise and a low-cost deposit base. This ensures good pricing power and sustainability of above-average NIMs (net interest margins). As a result, the bank has always reported consistently good earnings.
This has, in turn, led to high return ratios compared to its peers. It’s also extremely conservative with its margins and provisioning policies. Therefore, it comes as no surprise that HDFC Bank's net NPAs have never crossed 0.5% of its loans.
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