The stock markets are in turmoil.Hell,the whole global economy is reeling.Where does one go and park their money with the stock markets playing with the Investor sentiments.Well,the purists will tell you to keep cash in hand and wait for the right time.But then,who knows when the right time will come.
But,a true stock market believer that i am,I cannot buy the idea of staying away from the markets when they are tagged “For Sale”.The sentiments are weak because of the global factors but does that change the fundamentals of the companies you wanna be a stakeholder in.Probably,the stocks are something that one keep away from sometime but then there are so many stocks available for cherry picking.
In testing times like these ,it is best to pick up the dividend rich stocks.Why??
1.A dividend paying stock is the most investor friendly.They will share their profits with the investors and this profit isn’t contributed from the stock market.
So,even if the markets aren doin well the company’s profits will come to you.
2.Dividends are the add-on bonus to your investments.You get a meanigful cash just by holding the stocks.So,you make good money without even selling the stock.
3.Dividend paying companies are mostly from the public ,public-private ownership sector.This means that the companies are there to stay and they always have the tax-payers(our money) for bailing themselves out
4.Having a healthy dividend stock portfolio will always inspire you to hold on to your investments,cos the longer you wait the more dividends you get.
As a personal example,i have been holding 70 shares of VARUN SHIPPING for over 6 months.The current price is quite low but then ,i received a dividend of 140 rupees sometime back.That means that my 2 shares become free of cost(i bought at 70 Rs) and all this without doing anythin and even when the stock markets are in trouble.That’s because that the company is a dominant player in its sector(shipping) and have been growing well.
But,how do we know which stocks pay dividend???
This is a testing one since no company comes with a label “we pay dividends”,but past records can be a good way to determine the companies ability to pay out dividends.
P/E also helps in determining the probable dividend rich stocks.Read more about P/E
Do you think that dividend stocks should form a part of the portfolio?? Comment on
Please share you views on the dividend stocks you are aware of and how to track them