Dividend giving stocks
About 5 years back I was very regular in doing stock market trading. I used to do daily trades and it was a great experience. I was doing this with my friend. He used to do a lot of research work and most of the time we were lucky to bag a decent profit. Later I lost touch with the friend and I was also very busy doing research work. I did hold some stocks but stopped doing regular trading.
I should even say that I kept my demat account idle and did not do any trade since then. I thought it would be good to invest in some mutual funds but there again, I couldn't keep up and stopped doing that too. I wanted to write this article to share my experience with Dividend giving stocks. I'm going to talk about only one stock in particular even though there are so many Dividend giving stocks out there.
Upon advice from a few people, I bought some REC stocks and have been giving a decent dividend ever since I bought them. The dividend I get from this stock could be close to 10 percent every year I think. I thought of booking some profits as the value of the stock had also gone high after my purchase. But then I thought I shouldn't cut the hen that produces a golden egg every now and then.
Investing in Dividend giving stocks
Some people keep this as a safe strategy where they pick some solid stocks that have a good trend in the market and invest in them. The stock not only has consistent growth every year but at the same time also gives nice dividends. If we are lucky we would also be getting some bonus stocks based on our holdings. I was lucky to get some bonus stocks once from REC when they did a split a couple of years back.
Every year the dividend is given only after the TDS deduction. This way the income tax department has visibility over this income and they take a standard 10% tax on these dividends. Investing in stocks is a risk but at the same time getting a dividend is a compliment and there is no harm in paying a tax amount for the dividend amount. I think even after the tax is deducted the net percentage is definitely better than the interest we would be getting for saving the money in the bank.
I personally think that dividend-yielding stocks are better because they act as a good source of income and at the same time based on the good stock we purchase, there is a high chance that we would also be getting an increase in the value of the stock from the bought price. We can also sell them for a good price and wait for the next market fall to purchase them back and hold them long term. Trading is also a possibility on these stocks because people know this is good and they tend to trade a lot. This keeps the price in movement and a good price fluctuation is always good for any stock to keep people stay invested.
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