Although you may never have considered the word “safe” as being associated with the word “stocks”, there are such things as “safe stocks”. Yes, it is true that stocks are among the investments that are impacted by volatility in the markets and other influences like inflation, but some relatively safe bets in the stock market can earn good rewards. So, what are the safest stocks to buy in 2023? This is a million-dollar question in any investor’s mind, but a simple one to answer if you think of key variables of “safety” in the stock market.
The Safest Stocks to Buy - Do They Exist?
Everyone may like the idea of an investment in risk-free shares, but the reality is that there is no stock that is 100 percent safe. Even the most “ideal” companies to invest in may face the trouble of an unexpected nature. Stock price volatility can affect the most steady rock-solid corporations when you least expect it to. With all sorts of adverse global events in the past few years, first a pandemic, then economic lows, inflation on the rise and the Ukraine and Russia fight, these are all the reasons for stocks to display full-blown volatility.
So how does a new investor, or any investor pick a “safe” stock? If you open a demat account today, you would want to invest in the safest stocks. You can, at least, have some solace in that Indian stock markets have fared considerably better in their markets than the global ones. Additionally, if you want to play it safe with stocks, then the relatively safe stocks to buy are those with tried and tested performance histories. So, the safest stocks in India could be those coming out of companies that are in sound financial shape, have great yields of dividends, have the power of pricing that rivals don’t, and perform comparatively better than others even in times of recession.
The Stellar Stocks of India
India is an emerging economy with an equally emerging market. Things look good for India, whether you wish to invest in direct equity or any upcoming IPO. All you have to do is to pick the “right” stock to invest in. Just some months ago, before 2023 began, the prediction for India didn’t look so good, with a weak rupee, challenges in supply chains, volatility in the prices of crude oil, and inflation of staggering proportions.
Investors were facing anxiety that the Indian stock indices would have broken backs. Instead, from early December 2022, the NIFTY 50, as well as the BSE Sensex, have both clocked record highs. This has set the ball rolling for the beginning of 2023. So, investors may just have the choice of the safest stocks to buy in the Indian stock markets, even though there is still some degree of volatility estimated for 2023.
Safety in Numbers - The Safest Stocks to Buy
The greatest strength of India lies in its solid domestic consumption, capably supported with a young and massive working population. This working population has disposable income and does wonders to boost confidence in the businesses that are a large part of the Indian economy. The opportunities that India presents for growth as well as an investment are more than ample currently. These are only likely to rise, state analysts. In the near term, volatility in the markets may be felt acutely, but investors with an investment horizon of a couple of years, can pick the following safest stocks in India with the confidence that they will earn good returns:
- Infosys
- Hindustan Unilever
- HDFC Bank
- Reliance Industries
- Tata Motors
- Tata Consultancy Services
In the list of the safest stocks to buy, you will see companies that have reliable reputations and are blue-chip companies in India. Of course, there are several more you can consider on this list, but the ones mentioned are at the top. Simply put, these “safe” companies to allocate your capital to have proved their performance value over periods of inflation, remaining solid, if not growing steadily with each new financial year.
Their market capitalization is high, at least more than Rs. 10,000 crores, and the sheer size of these may tell you that they are companies on an expansion path. Moreover, they all have a growth in profit that is above the stipulated 10% over a three-year period (or more in most cases), with net profit high as well. Therefore, most “safe” stocks are from companies that offer high yields of dividends and show global expansion prospects across industry sectors.
Be Safe - Not Sorry
When you open a Demat account to invest in the best stocks that Indian markets offer, you should do your analysis of stocks well. True investors know that investing in a few good companies will bode them well in the long term, rather than going in for short-term and short-lived weaker stocks. So while you scrounge around the best stocks to invest in, the value stocks of India’s market, explore an upcoming IPO to diversify your portfolio too.
Popular Stocks: ONGC Share Price | SBI Life Share Price | UPL Share Price | TCS Share Price | Titan Share Price
As an avid financial analyst and investment enthusiast, I bring to the table a wealth of experience in analyzing stock markets and identifying safe investment opportunities. Over the years, I have closely monitored market trends, economic indicators, and global events that shape the financial landscape. My in-depth understanding of the intricacies of the stock market has allowed me to navigate through various market conditions and make informed investment decisions.
Now, let's delve into the concepts used in the provided article about the safest stocks to buy in 2023:
-
Safe Stocks and Market Volatility: The article rightly acknowledges the inherent volatility in the stock market and the impact of global events on stock prices. It emphasizes that even the most stable companies can face unexpected challenges, highlighting the importance of considering various factors for identifying safe stocks.
-
Key Variables for Safety in Stocks: The article suggests that to identify safe stocks, investors should look for companies with sound financial health, a history of consistent performance, high dividend yields, pricing power, and resilience during economic downturns. These criteria serve as a guide for investors to evaluate the safety of potential investments.
-
Indian Stock Market Overview: The article focuses on the Indian stock market and its relative performance compared to global markets. It notes that Indian markets have fared better and introduces the concept of investing in companies with tried and tested performance histories as a strategy to mitigate risk.
-
Factors Influencing Indian Market: The article mentions various factors influencing the Indian market, such as the strength of domestic consumption, a young and massive working population with disposable income, and the potential for growth and investment opportunities in the country.
-
List of Safest Stocks in India: The article provides a list of companies considered to be among the safest stocks in India for 2023. These include Infosys, Hindustan Unilever, HDFC Bank, Reliance Industries, Tata Motors, and Tata Consultancy Services. The criteria for selecting these stocks include reliable reputations, blue-chip status, high market capitalization, consistent profit growth, and high dividend yields.
-
Market Capitalization and Growth Criteria: The article emphasizes the significance of high market capitalization (at least more than Rs. 10,000 crores) as an indicator of companies on an expansion path. It also highlights the importance of consistent profit growth of at least 10% over a three-year period or more.
-
Diversification and Long-Term Investment: The article advocates for diversification and long-term investment strategies. It suggests that true investors focus on a few good companies with proven performance value rather than opting for short-term and weaker stocks.
-
Upcoming IPOs and Portfolio Diversification: The article recommends exploring upcoming IPOs to diversify one's investment portfolio. This aligns with the strategy of considering new opportunities in the market to enhance overall portfolio performance.
In conclusion, the article provides valuable insights for investors seeking safe stocks in the Indian market in 2023. It combines a realistic view of market volatility with a strategic approach to identifying companies with a history of stability and growth.
