The 8 Rules Of Dividend Investing


wealthymattersDividend investing involves accumulating stocks that issue dividends to generate a steady stream of passive income.

 

Rule #1: The Quality Rule

Invest in high quality businesses that have a proven long-term record of stability, growth, and profitability.  There is no reason to own a mediocre business when you can own a high quality business.Rank stocks by dividend history and corporate history ,the longer the better.  Stocks must have paid steady or increasing dividends through the worst periods of financial stress and turmoil to be eligible for inclusion in your portfolio.

 

Rule #2: The Bargain Rule

Invest in businesses that pay you the most dividends per rupee you invest.  All things being equal, the higher the dividend yield, the better.  Additionally, only invest in stocks trading below their historical average valuation multiple to avoid investing in overpriced securities. So rank stocks by dividend yield. Only stocks trading below their say 10 year historical average valuation multiple are eligible for inclusion in your portfolio. Read more of this post

Voya Corporate Leaders Trust – The Virtue Of Sloth


Ever wondered what might happen if you just bought some leading stocks,once only ,early in your life,and simply held onto them for a life-time ? Generally practiced sloth? Arousing yourself perhaps only if a company went bankrupt or stopped dividends ?

Then here is a story for you : Read more of this post

Investing In Turnaround Stocks


wealthymatters

Turnaround stocks are stocks of companies that have gone through a phase of weak financial performance and whose share prices have been beaten down,but are likely to rise again as companies change their business strategy to become profitable again.

Now,if you are the bargain minded sort,you are bound to be attracted to this idea of identifying gems going cheap,holding them long,and having your wisdom and foresight validated by tidy profits …..!

But do contain your eagerness and look before you leap.Investing in turnaround stocks can yield spectacular returns to investors willing to buy into them when there literally seem be few takers and hold on,but then again wrong calls can lead to permanent loss of capital when the anticipated turnaround doesn’t  happen or gets stalled. Read more of this post

The New Case For FDs


wealthymattersYou can’t run a shop without cash in the till. And in the same way you can’t get through life smoothly without a certain cushion of readily accessible cash that you can dip into as per your need. For quite a while now, readily accessible money meant various types of bank accounts, stocks and mutual funds that you could cash in fast whenever needed even as they continued to grow quietly in the background.

However, this year’s budget has changed the situation a bit on account of the 2 quotes below:

The return on investment in equity is already quite attractive even without tax exemption. There is therefore a strong case for bringing long term capital gains from listed equities in the tax net. However, recognising the fact that vibrant equity market is essential for economic growth, I propose only a modest change in the present regime. I propose to tax such long term capital gains exceeding Rs1 lakh at the rate of 10% without allowing the benefit of any indexation. Read more of this post

Dynamic Asset Allocation Funds – For When You Need To Sit On Your Hands


wealthymatters

I’ve had my financial habits called “inertia”. So for most of the time I must be doing somethings right. There is nothing like hyperactivity and  thrill-seeking to destroy your wealth or the capacity for wealth. Read more of this post

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