Are High-Yielding Dividend Stocks The Right Choice?

Many of the high dividend-yielding blue chip companies tend to be consistent performers and are dependable when the stock markets are going through a bearish phase or uncertainty. Join Anthony Fernandes as he finds out how one can select quality dividend-yielding stocks to ride through difficult phases in the market.

The Indian equity market is in the midst of a perfect storm along with most of the world markets, across asset classes. The corona virus pandemic has led to economies coming to a screeching halt. The Sensex has lost more than 30 per cent so far this year; that’s nearly 13,000 points and is down about 33 per cent from its record high of 42,273 registered on January 20, 2020. In such a volatile phase, investors find themselves experiencing extreme emotional shifts with the unpredictable rise and fall that come with stock market investing, unsure whether they should put in their hard-earned money in the stocks now or wait for a better opportunity later.

During such times one must remember that the index has experienced severe declines and bear markets before. It has always recovered from them, and there is a high chance it will do likewise following its current woes. At such a time, companies with a high dividend yield can be an investment option to be counted upon. Many of the high dividend-yielding blue chip companies tend to be consistent performers and are dependable when the stock markets are going through a bearish phase or uncertainty.

An investor may not realise the benefit of less volatility when the market is stable, but when the market is going through a downtrend, these stocks may very well be the right bets to ride through the troubled times. Moreover, during market corrections like the one we are experiencing currently, there exists a huge opportunity to get quality dividend stocks at 20 or 30 per cent discounts. All investors need to do is to spot where these low hanging fruits are.