Investment environment for amateurs continues to become difficult with each passing day. This is because several factors such as higher volatility in financial markets, deteriorating geopolitical tensions and a range of investment options continue to act as distraction foe the beginners. Collectively, these factors result in lack of focus too. Therefore, finding the best investments for beginners is not a cakewalk for today’s investors.
Amateurs had no worries when there was cheap credit was cheap and technology stocks (which includes the speculative ones) were reaching new highs irrespective of valuations and other key metrics. However, situation turned different when inflation went out of control. Because of this, the US Federal Reserve started their rate-hiking campaign. As the result, all the investors decided to decrease their spending patterns they became cautious about speculative stocks.
The financial markets are required to be reminded that there are some things which are better off constant. Despite of the fact that futuristic technologies including biotech, AI, IoT, etc. are expected to lead the digital world and several companies working in such domains are expected to see significant gains, one cannot blindly invest in each and every company coming across their way.
This brings us to the age-old question-What are the best investments for beginners? This has been asked to every successful money or fund manager, billionaire or financial advisor. Beginners should know that the data and research on the internet is waiting to be discovered. That being said, we all know that wisdom is easy to discover. The difficult part is action. Despite the repeated theories from the stock market legends about the long-term investments, the beginners find it difficult to wait for such a long time and they pay heed to the short-term fluctuations.
With this in mind, we will now have a look at best investments for beginners as markets seem to rebound.
1. Bajaj Finserv Ltd.
The company has been categorised as an unregistered core investment company under the Core Investment Companies (Reserve Bank) Direction, 2016. The company’s products include savings products, consumer and commercial loans, mortgages, etc.
Bajaj Finserv Ltd.’s consolidated total income and profit after tax went up by ~25% and ~24%, respectively in 2Q24.
Bajaj Finserv Asset Management saw encouraging response to the mutual fund schemes which were launched in 2Q24, with Assets Under Management (AUM) touching INR 5,235 crore as at 30 September 2023. Bajaj Allianz General Insurance Company Ltd. saw gross written premium rising by ~53% to INR 7,298 crore in 2Q24 v/s INR 4,781 crore in 2Q23. Net earned premium for 2Q24 came in at INR2,250 crore in comparison to INR 2,090 crore in 2Q23.
2. Coforge Ltd.
Coforge Ltd is the global digital services and solutions provider, which uses emerging technologies and deep domain expertise so that real-world business impact to the clients can be delivered.
The company released its results for 2Q24, with strong operating and financial performance as a result of strong growth, margin expansion and healthy business momentum. Revenue for the quarter came in at INR 22,762 million. The company’s revenue went up by ~14.1% year-over-year in constant currency, ~12.6% in USD and ~16.2% in the INR terms. Adjusted EBITDA margin of the company came in at ~17.6%, which saw an improvement of 160 basis points quarter-over-quarter. Order intake for the company came in at $313 million. With this, the company saw 7th consecutive quarter of $300+ million order intake.
Consolidated Profit After Tax of the company for 2Q24 came at INR 1,810 million, exhibiting a rise of 9.5% quarter-over-quarter. The company signed 3 significant deals during 2Q24. Offshore revenue contribution (i.e., only the IT revenues) grew to 52%.
The company reiterated fiscal year 2024 annual revenue growth guidance of between 13% – 16% in constant currency terms. Apart from this, it reaffirmed gross margin improvement of ~50 bps in comparison to FY23, with adjusted EBITDA margin to remain similar to FY23 levels. Total order book executable in the upcoming 12 months came in at $935 million, exhibiting a rise of 16.6% year-over-year.
The Board of the company announced an interim dividend of INR 19 per share, with the record date for this payout of 2nd November 2023.
3. Infosys Ltd.
The company has been categorised as the global leader in next-gen digital services and consulting. It continues to enable clients in over 56 countries to navigate digital transformation.
Infosys delivered $4,718 million in 2Q24 revenues, which exhibits year-on-year growth of ~2.5% in constant currency. Large deal TCV 2Q24 was $7.7 billion, with net new of ~48%. Operating margin of the company for 2Q went up by ~40 basis points as compared to 1Q to 21.2%. Attrition fell further to 14.6%.
The company has revised its FY24 revenue guidance to 1.0%-2.5%, operating margin guidance of 20%-22% retained.
Strong 1H performance supported by the significant large deal wins should build foundation for the future growth. Increased adoption of the company’s generative AI offering, Topaz, continues to help the company in delivering consistent value and improve the market share.
2Q operating margin of ~21.2% exhibits early benefits of margin improvement plan which was launched recently. This is the reflection of the company’s ability to identify opportunities to improve the operational efficiencies.
Infosys and NVIDIA joined hands to help enterprises to boost their productivity levels with the help of generative AI. CEO of NVIDIA mentioned that generative AI should be able to support next wave of enterprise productivity gains.
Conclusion
While above are some of the best investments for beginners, they are required to assess their investment horizon, financial goals, risk appetite, size of the company, etc. If a beginner is searching for the best stocks with little money, it is of utmost importance to assess how much risk an investor is willing to take on with that particular investment strategy.
At the time of deciding whether or not to consider best investments for beginners, investors will have the idea regarding the money they have for risk.
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