Benefits of dividend investment
Investing your amount into dividend investment is a smart idea, but one has to refer to the ongoing dividend index to make a smart investment of their money.
Thematic investing is also one option that you can look for other than dividend investment, the total return indices are important as this helps a person for better understanding of the market situation.
But following are the benefits of having dividend investment.
- Passive income – The dividends enable an investor to have a passive flow of income and to get that one can choose to reinvest the amount earned or personal use them. So dividend stocks are quite attractive for someone who is looking for potential supplementary income.
- Ownerships along with profits- if you are an equity share holder the only way they earn profit is at the times of sales of their shares or when the company decides unlike the dividend holders they get the benefit of regular dividend as well as they are the constant owners of the shares as well, they need not sell their shares to earn profits.
- Double income – Well normally the company gives profits as dividends only when they are doing extremely good and this increases their price on the stock market, so the dividend owners get double income of having profits in the form of dividend and having raised amount of money as well.
- No further of personal investment – if you buy dividend shares of one company and willingly invest it than the company might give you away some dividends out of it. For this you must remember that you can always choose to reinvest the x amount earned into the shares of the same company, as it is you already know that the company is doing extremely well because of the dividend payouts they have been giving you.
People must always remember that dividend shares though are risky but the potential returns of these are way too high as well so investing in them will be surely double profitable for one. Make sure you have a proper research before making an investment.
Source : https://equityindex.wordpress.com/2017/04/11/benefits-of-dividend-investment/