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.
Esta historia es de la edición March 30, 2020 de Dalal Street Investment Journal.
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Esta historia es de la edición March 30, 2020 de Dalal Street Investment Journal.
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