Many says that choose high dividend paying stocks to earn money as they tend to give you income in a regular way while there is a community which wants to stick with such stocks which in-spite of paying dividends gives long terms capital gains to investors. Recent year of 2013 has been quite crucial for FTSE in UK as it looked struggled all the time to maintain it’s peak position of 6,800 points.However some advise to look outside FTSE 100 stocks and choose best performing stocks from FTSE 250. Do you know what could be the best strategy for an investor during bearish market conditions. There are times when stocks starts to fall all of sudden and if you depend on long term capital gains heavily from stock market, thing become worsen for you. On the other hand if you are a guy who lives on dividends earning from stocks, in that case perhaps you wont be that much bothered.
A good Approach according to me says keep your investment portfolio balanced and keep all kind of stocks in your portfolio i.e stocks which does not pay dividends, dividend paying stocks, dividend stocks with high yield, Undervalued stocks, dividend stocks from best performing sectors etc. If you will keep your portfolio balanced, there will be very few situations when you will not be making money through your dividend stocks. Obviously you have to decide an ratio amongst the stocks that are most profitable fot you or can be proved profitable for you in near time.
Expert investors suggest to include best performing stocks from each well performing sector, industry. Suppose you came to know that in UK currently FMCG, Medical, Telecom sectors are good performing sectors in the current meantime then it makes a sense to choose FTSE Stocks that comes under these sectors. To make dividends great one common approach says choose stocks from mid cap region and don’t be too selective in Large cap region of any economy. Reason of saying this is mid cap stocks have much great possibilities to grow their business in comparison of large cap stocks.