Investment for Retirement : Dividend Stocks

by khalid on 26/08/2009 · 2 comments

dividend payout

Dividend-paying companies have well-established cash flows and tend to be more stable, safer, and less volatile. If you want an additional income after your retirement, you should go for atleast 70% of your investing money into these stocks, some names of high-dividend yield and consistent dividend payers for years are Reliance Industries, ICI (India), Novartis, Indo-Gulf Fertilisers, KEC International, and many more.

In these days of weak economic news like global slowdown, poor monsoons, rising fiscal deficit and slacking foreign demand, investment experts are raising concerns about going for a pure-growth stock strategy, instead investors should consider to invest in companies with strong cash-flows and well-entrenched business models with a good dividend track record and strong cash balances.

Being less volatile in nature, dividend-yielding stocks give opportunity to profit from rising markets while providing downside safety, which is very important for investors of age group 55 to 65 years.

Investing in dividend-paying stocks is not easy and investors must watch out for a few factors like consistency of dividend, and the longterm business growth. Also, watch out for companies that are in the investment phase of their business which requires capital, and therefore, means lower payout ratios. High dividend stocks are good investments for any age group, but it holds particularly true for individuals nearing retirement age.

These days of recession sectors such as oil & gas, petrochemicals, BFSI, auto, and pharma will find it difficult to maintain their payout ratios. At the same time, power, metals, and FMCG can be considered safe bets as payouts are expected to be favourable here.

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{ 2 comments… read them below or add one }

Allen Taylor August 26, 2009

Nice writing. You are on my RSS reader now so I can read more from you down the road.

Allen Taylor


khalid August 29, 2009

Thanks Allen for your nice words, I would also like to be your RSS reader


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