You can invest in different types of stocks in the Indian stock market based on your investment goals and risk appetite. These stocks fall under broad classifications which can help you make an informed investment decision. You can also take professional
stock market advisory if you are a new investor or need help with existing stock portfolio management.
Here are various stocks you can consider for investing:
Based on Market Capitalisation
Large Cap Stocks
These stocks belong to the top 100 companies with large market capitalisation, usually more than Rs20,000 crores. These are renowned and well-established companies with a stable track record on the stock market.
Mid Cap Stocks
These stocks belong to companies ranking between 101 and 250 as per their market capitalisation. Their cash reserves range from Rs5000 crores to 20,000 crores. They provide moderate returns and growth.
Small Cap Stocks
These stocks belong to companies ranking 251 and above. Their market capitalisation is less than Rs5000 crores. Though they are risky due to high volatility, they have high growth potential.
Based on Profit Sharing
Growth Stocks
The companies that offer growth stocks reinvest the profit on these stocks to accelerate their business. You can also sell these stocks for capital gain instead of letting the company reinvest. However, these stocks are also more vulnerable to market swings.
Income Stocks
The companies give consistent dividend income on income stocks. Hence, they are also low- risk investments. However, the capital appreciation on income stocks is lower than on growth stocks.
Based on Fundamentals
Overvalued Stocks
The prices of these shares are higher than their intrinsic value. They prove valuable if you hold them for a long period.
Undervalued Stocks
The prices of these shares are lower than their intrinsic value. You can buy them at lower prices from large cap or high-growth companies.
Based on Price Fluctuation
Beta Stocks
Beta (ß) is a statistical measure to understand a stock’s responsiveness to market volatility. If ß>1.0, then the stock is risky.
Blue Chip Stocks
These stocks are issued by financially sound companies with a strong market reputation due to their long-running business operations. While their cost is high, they offer stability against
market fluctuations.
Based on Economic Trends
Cyclical Stocks
The prices of these stocks rise and fall in tandem with economic trends. They will increase during the boom cycle but decrease in the recession.
Defensive Stocks
The prices of these stocks are hardly affected by the market cycles. They continue to offer stable returns or consistent dividends.
It is advisable to analyse all these stocks by evaluating the company’s financial reports, financial ratios, past performance, vision, management board and other various parameters before investing. However, this can be a tedious exercise. You can consider consulting the
best online stock broker such as Ajmera x-change.
A one-stop financial services platform and an
online stock trading company, we can help you invest and manage your stocks efficiently. Our experienced team conducts in-depth analysis of all stocks and leverages sophisticated technology to recommend the best stocks for your investment portfolio.