Synopsis
As the market continues its free fall, here’s an unconventional question: How do individual investors differ from institutional investors? The distinction lies in a key factor that most individual investors overlook when buying stocks, but institutional investors always consider. That is dividend yield. Unlike institutional investors, who consistently evaluate the dividend yield of a stock, most retail investors pay little or no heed to whether a company even pays dividends. Their primary focus is on capital gains rather than the steady income dividends provide. There is nothing wrong in focusing on capital gains, but sometimes dividend yield does better than you may imagine, even on the capital gains front.
We have something called a dividend yield tracker. A few months back, when we ran a query to find out how many stocks are offering dividend yields above 2.7% (the logic for the 2.7% cutoff is given below in detail), the tracker threw up 10 to 12 stocks with dividend yields higher than 2.7%. This weekend, when we ran that query again, there were over 130 stocks with dividend yields higher than 2.7%. Almost 10 times the number prevailing a few
- FONT SIZE
AbcSmall
AbcMedium
AbcLarge
Uh-oh! This is an exclusive story available for selected readers only.
Worry not. You’re just a step away.
