1 | what is the dividend strategy?
The dividend strategy is an equity investment approach that invests investors in companies that pay out a large portion of their profits to shareholders each year . This profit distribution from a stock corporation to its investors is called a "dividend". Whether anything at all and, if so, how much is distributed, will be decided at the annual general meeting of the respective company. In addition, companies that are suitable for the dividend strategy often have a high dividend yield. The dividend yield is a classic measure for the valuation of a share and refers to the ratio of the profit distribution to the share price times 100%.
The dividend yields of DAX stocks are usually 2% to 3%.
There are companies that are keen to steadily increase their dividend payout. Those who manage to do so over 25 years can count themselves among the dividend aristocrats. Incidentally, investors who do not want to look for the stocks with the best dividend distribution themselves can also buy special ETFs for them. For example, there is the DivDAX, an index that only includes companies with high dividend yields. But beware: There are only 15 individual titles in the DivDAX - so there is no sufficient risk distribution guaranteed!
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2 | Where does the dividend strategy come from?
The inventors of the dividend strategy are Michael B. O'Higgins and Benjamin Graham. The difference between the two investors is that Graham simply selects the stocks with the highest dividend yield, while O'Higgins filters out those stocks with the lowest price.
3 | Advantage of the dividend strategy
High dividend companies tend to be companies that are financially sound and therefore considered to be very reliable - for example, CocaCola, McDonald's, Procter & Gamble or 3M. If you hold these stocks in your portfolio, you can be pretty sure that you will not suffer a total loss or go through huge price swings.
4 | Disadvantage of the dividend strategy
However, because dividend strategists only select certain company stocks, they use stock picking. The disadvantage of this is that there is less risk diversification and at the same time the return on the overall portfolio is not optimal. For example, investors bypass all companies that cannot pay dividends or reinvest profits most often, such as young companies and technology companies.
5 | Evaluation of the dividend strategy
Investors should be aware when investing in stocks that stock gains are made up of stock appreciation and dividends. It does not make any difference to them from a profit perspective, whether a dividend is distributed or not. Because the profit is either way there - either in the form of the distribution or in the form of an increase in price. A dividend distribution always comes at the expense of price gains: The stock market corrects the price of the share on the "Ex dividend day" after the Annual General Meeting by the amount distributed below. This is called the so-called dividend discount, After all, a company that pays a dividend is then poorer by exactly this amount and thus worth less. Thus, the dividend distribution for a company offers basically no advantage over a reinvestment. In addition, investors must be careful with the index "dividend yield":
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Stock buying and selling is obtaining and promoting stocks of publicly traded companies.
Inversely, if there are greater dealers than consumers, the rate has a tendency to fall.
Trading wishes field and the proper mind-set to alter the funding.
Hire a web dealer: First and foremost, you need to recruit an excellent brokerage that prices a flat price for buying near the fundamental format of the marketplace.
If you want to know about the stock exchange, here William Savary explains the services and functions of the stock exchange.
Introduction of a new exchange technology, and offering incentives to banks drive the growth of the Armenia stock market.
Whereas, immature capital markets and lack of private equity, and decline in public stock market impede the market growth.
On the other hand, cooperation in the Armenia market is expected to offer new opportunities to the market.As per the report published by Allied Market Research, the Armenia stock market generated $5,601,849,231.9 in 2017, and is anticipated to reach $11,497,532,470.0 by 2026, registering at a CAGR of 8.0% from 2019 to 2026.
The report offers a comprehensive analysis of the Industry dynamics, key market segments, market trends and estimations, top investment pockets, and competitive landscape.Read Full Article: https://bit.ly/33glikT The Armenia stock market segmentation includes type and issuer type.
Based on type, the market is divided into equity, corporate bonds, government bonds, REPO, foreign exchange, and auctions.
The auctions segment held the largest market share in the Armenia stock market, accounting for nearly 97.3% of the total market share in 2018, and is expected to maintain its lead position throughout the forecast period.
It is Not Necessary to Do Extraordinary Things to Get Extraordinary Results.
There are so many Facebook, and What’s app groups present in the market which is providing tips in the groups all across social media channels and many so-called traders and analysts are giving so much advice on stocks.
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You should look at the stocks as small pieces of the business.If the business does well, stocks eventually follow.You need to make sure that you know the main product line up of the company in which you want to invest and you must understand the present situation going on with the trend and the sector of the organization, which means if at this point of time where the pandemic is going on so the only defensives like pharma that to be Cipla or Glenmark or Syngene or SPARK or IT kind of the sector are good to go which will get benefited at this point of time because of CORONA.
Most important is integrity, the other two can be managed.
Rotation of AssetsMake sure that you keep rotating the disciplined approach of booking profit in a portfolio, normally in our view, 10% to 15% is the level at which you must book the profit, stock may go up by more than that, do not feel bad in that situation, as the market will keep rotating.
