FTSE, owned by London stock exchange is a stock market indices and associated data provider in UK. Many Investors believe in theory of going against the crowd and buy unfavorable shares just in hope to get some charismatic rewards through the dividend paying stocks in UK which they choose to invest their money within. The difficulty in with share market investing is that it assumes that you know how to identify 3 primary risk factors that can led you to a permanent loss of money. These 3 risks are business risks, financial risks and valuation risks.
Business Risk occurs when you have a doubt that company you are investing will be able to deliver you the same level of profit or not in next 3-5 years. Financial risk occur when an inappropriate level of debt can undermine the shareholder’s value. Valuation risks occur when you know that you are over-paying for a shares in compare to it’s power to generate long term returns in UK.
Also, it’s not wrong completely to go towards unfavorable stocks which are not well noticed by investors community and generate excessive amount of returns as such shares recover quite quickly in FTSE Dividend Stock Market. But, before you go towards investing in unfavorable shares I guess it’s much more important to identify the undervalued one existing in FTSE 100 indices or any other indices in UK you might be interested in. Strategy of Finding Undervalued shares in indices has proven as successful even in the toughest times of FTSE 100. Many investors during the tough times of FTSE Indices tries to find undervalued dividend paying stocks in UK.
In 2013 FTSE struggled to maintain it’s benchmarking peak level of 6,800 all the time. I have an approach that works quite effectively in down-times of FTSE also. Approach says buy 15 dividend paying stocks in UK that pay you high dividend yield least if not best from 15 different Sectors of FTSE. As FTSE 100 Stocks represent Blue Chip Stocks available in London Stock Exchange and such large stocks are more immune to bearish situations of the stock market it’s more safe to take 15 stocks from FTSE 100 indices. Keep your portfolio of 15 dividend stocks well balanced by choosing stocks that give you higher dividend yield and stock which gives you higher long term returns.
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