In principle, most of the self-proclaimed educated/informed investors (including myself) will always gun their strategy for growth investing which is true in scenarios when looking at long-term wealth creation given the historical data.
However, there comes a time when you feel, the ROI and realized gain so to say aren’t what you would have expected. Additionally, given the current turmoil scenario in the markets, most of the new pandemic stock market investors would have realized what in reality the stock market is.
Another aspect is the mental churn with the current information age wherein data is available in abundance and keeping up real-time/daily/weekly/monthly with everything happening in and around the companies you are invested in along with macroeconomic and global scenarios in really taxing.
To the point that I am trying to bring the attention that after several years of investment eg. in a decade not everyone would want to continue to be into money making machine scenario and take things a little slower and let the system do its thing. Also, this narrative fits very well in the current bear market and global slowdown scenario.
Considering the below scenarios of Power Finance Corporation (PFC) and looking at its monthly chart, please see the performance:-
If we were to remain invested and continue to accumulate at lower range, the stock has given 100% return every 2 years and a superb dividend yield.
Given the goal of this company is to continue doing business as usual and pay heafty dividends back to govt kitty and not look at growth can really work out even for retail investors in long run.
It is a Maharatna company backed by GOI with a crazy pile of debt of 660K CR but they seldom aim at reducing the debt but prioritize high dividend payback as this money is used by ‘govt in power’ to invest/showcase in the growth story of India.
Last checked for FY21, with stock price hovering between 100-150, the total dividend paid up was 12.75/share which is a very good yield in current FD and bear market scenario.
There should not be any harm in diversifying your portfolio into a dividend strategy from Year1 and slowly increasing that % eventually making it 50%+ as your energy level and enthusiasm subsides in the journey of life.
You also need not break your head on daily basis crunching numbers etc. along with some sweet upside as icing on the cake. At last, we all want to chill and take things slow and not everyone wants to be mentally involved our whole life in the stock market like warren buffet but do enjoy other things like following our passion, travel, explore, family time and sleep in peace.
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