What should new stock investors buy? Abhishek Basumallick picks his bets

For investors determined to buy stocks directly, Abhishek Basumallick, co-founder and fund manager at Shree Rama Managers PMS, suggested starting with businesses they understand. He advised novice investors to start with FMCG, banking and consumption stocks.

For first-time investors looking for a safer long-term entry into equities, the smartest move may not be stock picking at all, he said. Basumallick said new investors should begin with mutual funds or broad-based exchange-traded funds (ETFs) before venturing into individual shares, arguing that simplicity and diversification matter more than chasing themes too early.

His advice comes at a time when retail participation in Indian markets remains strong and many new investors are trying to identify “safe” sectors for long-term wealth creation amid volatile macro signals, elevated crude concerns and shifting sectoral leadership on Dalal Street.

Funds first, stocks later

Responding to a query from a new investor, Basumallick's recommendation was unambiguous: “My honest advice for any new investor is to actually go through either the mutual fund route” or buy a “Nifty 50 or a Nifty 100, or a Nifty 500 ETF.” The message is significant because it shifts the conversation from sector hunting to portfolio construction.

For beginners, broad-market funds reduce the risk of concentrated bets while offering exposure to India’s growth story. That is especially relevant in a market where headline indices may move in a range even as midcaps, smallcaps and sector-specific pockets see sharp swings.

Why FMCG, banking and consumption stand out

For investors determined to buy stocks directly, Basumallick suggested starting with businesses they can understand. “You can look at overall FMCG, you can look at banking, you can look at consumption,” he said, describing them as themes that are easier to grasp for a novice investor.

The logic is straightforward. These sectors are closely tied to everyday economic activity and consumer behaviour, making them more intuitive than complex cyclical or niche industries. Banking offers exposure to credit growth and financial deepening, while FMCG and consumption provide a window into household demand trends.

Knowledge before conviction

Basumallick's broader investing framework, reflected across the discussion, was rooted in quality, reasonable valuations and earnings visibility rather than macro forecasting. He argued elsewhere in the conversation that investors should focus less on uncontrollable macro noise and more on business fundamentals and earnings trajectory.

That philosophy also explains his caution for beginners. “For new investors the best option is to go through the mutual fund or the ETF route till the time you are able to gain some knowledge,” he said, adding that only after building that understanding should investors start buying direct stocks themselves.

In a market flush with tips, themes and momentum trades, that may be the most valuable lesson of all: for new investors, discipline can be a better starting point than conviction.