The market correction this time around has surprised the bulls even as the optimistic bears eye further downsides. While several economists and market analysts speculate a recessionary period for the economy and hence a bear market for equities, investors have started to seriously rethink their portfolio strategy biased towards growth stocks. Time and again we have seen that higher inflationary periods and rising interest rates impact most negatively the growth stocks. In the past few years, we have evidence of investors lapping up on growth stocks and ignoring value stocks.
However, the trend of growth investing seems to be taking a huge hit in the course of the recent market correction as is evidenced by the drop in NASDAQ and IT stocks in the Indian markets. The preference for value stocks amongst portfolio managers is discussed in investing circles. Here is where the dividend-yielding stocks come into play. High dividend-paying stocks are considered to have some embedded value not only because of their ability to pay dividends consistently but due to stability in earnings.
It is not unusual to see a fall in stock prices getting arrested owing to the high dividend yield that a stock has on offer. There is high probability of investors chasing high-dividend yield stocks in market downturns and hence the buying can emerge earlier in high-quality dividend-yielding stocks than the hot and most popular growth stocks. So, why prefer dividend-yielding stocks over non-dividend-yielding stocks? The basic requirement before choosing any stock for investing is to verify if the fundamentals of the stock under consideration are good. A consistent dividend pay-out supports the story of strong fundamentals for the stock and hence it instantly becomes appealing for investors who are willing to buy and hold for the long term.
Diese Geschichte stammt aus der May 23, 2022-Ausgabe von Dalal Street Investment Journal.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der May 23, 2022-Ausgabe von Dalal Street Investment Journal.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures