Good Returns with Safe Investment

Author: SAM
Currently the stock market is very volatile and it is in bearish trend, so on such situations most of the people have negative thoughts about stock market.

Yes, it is true that stock market is very risky especially day trading or intraday trading as it needs huge experience and over all knowledge about stock market. But on the other of this scenario, the stock trading is profitable and also safety – How and when?

Everybody is concerned of safety and security in their respective lives, especially regarding their financial investments.
This article will give you overall information about safe stock investments and how to tap such strategies.

Those who want to think of safety investments in stock market or those who want to become safe investor than he/she should think of investing in high dividend yielding stocks. This article will give you details of same

First of all what is High Dividend Yielding Stocks
High dividend yielding stock is one that gives you a high dividend per share when compared to the current market price of the share.

The investor should look for such stocks particularly when the market is in a bearish phase because it has been observed in the past, that high dividend yielding stocks proven to be more defensive (safe and less volatile) in downtrend of the market.

Tax-free Returns
The advantage of investing in such stocks is that you can earn decent tax-free returns on investments as dividends are not taxable.

There is always the possibility of these stocks appreciating when the equity markets rise in the medium to long term. There may be a case where the dividend yield could even exceed the current bank interest rate.

Precautions while investing in high dividend yield stocks
When investing in high dividend yielding stocks, one must need to look carefully at the numbers shown by the company, as many of the stocks in the high yielding type are rather cheap, and need to verify what dividends they are actually giving.

Make sure that the company is consistently paying good dividends, also look for the previous year’s performances, which could have been altered by extra ordinary events, so by comparing the current yield of a scrip over a period of time, one can determine whether the growth in the dividend payout has been proportionate to the increase in the market value of the stock.

You also have to look for the fundamentals of the stock in terms of growth, creditability of the management, financial ratios and hidden assets on the company’s balance sheet. If the fundamentals have declined in the recent past, the company may not pay the dividends at the previous rates and there will also be a capital risk in terms of the stock price going down.

Advantages
Generally it has been observed that companies consistent paying dividend year after year carry strong fundamentals.

Recommended stocks
If you are looking to investing in high dividend yielding stocks, then please visit following link,
http://www.daytradingshares.com/High_dividend_yield_stocks.php

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Source: http://www.articlealley.com/article_642422_19.html
Author's hobbies are reading and working online on investments and that's why he has created websites http://www.daytradingshares.com - Website for Indian share market, day trading, delivery trading, online share trading, technical analysis, mutual fund and free daily tips nse bse, latest updates on share market news. http://www.intradaystocktips.org - Get free advice and guidance in Indian stock market, day trading, long term investing in stock, online stock trading, technical analysis of Indian stock market, free daily tips NSE BSE.
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