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The Investment starts with Building your Portfolio.

How to Build your Portfolio : Sector Selection

First you should select five good sectors where you will Invest your Money.

Please keep in mind that the sector should be such that, It will have huge growth potential at least for next ten years.

Take an example of Banking Sector -Everyone knows that for any Business money will be required & that means a lot of loans from Banks will be required so there is no threat to this sector for next 10…20…30 years.

You can study the growth potential of a sector & also the risks associated with it & Invest in any sector like Engineering, Pharma, FMCG,Banking ,Auto, Auto Ancillaries, Chemicals, Power generation, Plastic, Paper & many more

After shortlisting five sectors select 2 stocks from each sector .

Selection of Stocks:

1.Select few Leaders from the Sectors & study the fundamentals .

2.Study the last three years growth in profit Year on year .

The growth should be minimum 20% each year.

Study the sales growth, Do not include the stocks which are showing De-growth in sales .

The profit should be from regular business & not from extra ordinary Items .

Then study the Last five quarters & the profit growth should be minimum 20 % quarter on quarter .

3.Study other aspects like New Product additions etc.

Check if the company is innovative enough to add new product segments every year  .

4.Check the PE ratio-It should not be too high with respect to Industry PE

5.Avoid very low EPS Stocks

Make a portfolio with these rules .

Innovative Investing: You can make SIP of ten Best stocks & keep on investing every month with small amounts every month

Keep Investment horizon of at least for three to five years

Periodically review  the Investments & do not check on daily basis as you are investing for long term.