Top reasons to invest in high dividend yield stocks
December 29, 2016
Stock market investing
Top reasons to invest in high dividend yield stocks.
High dividend yield stocks can be an attractive investing choice in the stock market. They offer income and cash while if they are undervalued relative to their intrinsic or fundamental value, the return can be substantial compared to risk taken.
The basic advantages of investing in high dividend yield stocks
1.Sustainable income, cash to provide liquidity and help in financial planning in advance. Ability to cover expenses, holidays, gifts, or even larger financial choices such as a loan payment. Sustainable income is not an absolute term however, pending to economic and financial performance of the company and profitability.
2.Stocks with high fundamental analysis score and a high quality dividend are often safe and have lower volatility.
3.An average dividend annual yield of 10% is equal to doubling your initial capital investment in less than 8 years. Assuming there are no extreme stock market price action volatility with compounding, this seems an interesting idea for capital preservation and growth.
4.High dividend yield stocks are safer than IPOs or speculative stocks with losses, based on momentum and growth expectations which often are too optimistic by financial analysts.
5.High dividend yield stocks are often neglected by financial analysts and investors, considered boring. But is a stock that is providing a good risk-adjusted and inflation protected income, cash, money really boring?
These are some of the advantages that high dividend yield stocks offer. Even having a technical analysis indicating a range bound price action, a stock that offers an attractive dividend yield can be useful both in a portfolio for diversification and for producing cash and money at regular times. A stock and equities portfolio consisting only of high dividend yield stocks can play important role in financial planning, asset management and long term retiring goals. There are many stock market screeners that will help you make a thorough research and financial analysis to find these regular making money high dividend stocks.