If you are looking for good, large cap (safe) stocks to invest in, a good starting point can be a list of stocks trading near their 3 year lows. While putting down the ground rules for our portfolio, we had mentioned that large cap stocks can (or should) be bought when they are trading near their 2-3 year lows.
The reason we advocate 2-3 year lows as a good entry point is that as long as our purchase price is closer to 2-3 year lows (& the industry is not going to the dinosaurs and company is not going to go bankrupt), and we are ready to wait patiently, the odds would be in our favor that these investments will prove to be profitable.
Though this should not be the only criteria, it is a simple yet powerful criteria to look for bargains in large cap space. So here is a list of Nifty 50 stocks and their relative positions from their 3 year lows –
A stock may be near its 3 year low due to many reasons, like cyclicity of industry, overall pessimism in economy, negative newsflow about company itself, regulations or government interference in sectors, etc.
Though readers can make their own deductions, we would like to highlight that upper half of the list, i.e. stock which are closer to their 3 year lows, is dominated by industries like steel, power, oil, mining etc. So is it a good time to accumulate stocks in these sectors? It is for you to answer. 🙂
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