Dividend Investing Strategies || Easily Earn Dividend Income || Stock Market for beginners


Today’s video is about
dividend investing strategies. And we will tell you that
if you want to earn dividend income, then what is the best means or method
to do that. But before telling about it, I would like to tell you that
if you don’t know much about dividends, and if you want to learn
what dividends are, and why to invest for dividends, then do watch our other video
which explains about dividends and why mutual fund dividends
are not actually dividends. If you are new to dividend investing and you don’t know much about dividends, then do watch that video
before watching this video. Because this video will focus only on
the dividend investing strategies. As I said, the dividend investing strategy
is a very established strategy that is followed by many people
around the world to earn dividend income. It is very popular. And there are many people in India
that I know, and you may know some too who really focus on dividend income. If you are one of those investors, then you must already know
that, generally speaking, the most popular method is that you find dividend-paying stocks that have high dividend payout
or the high dividend yield or have increased dividends
to a great extent. There are many types of data points that needs to be researched to
identify those stocks so that you can earn
good dividend income from them. But not everybody can do that. It is not easy to do that
because you have to use many filters, and various ways to screen stocks. And you have to ensure that you are
ultimately investing in those stocks that not only pay dividends, but are actually good companies
in which you would like to invest. Many companies pay a lot of dividends
and have a high dividend yield, but they are not necessarily
good companies. So if you invest in stocks on your own,
like many people do, they will tell you that you need to obtain a lot of knowledge
before taking these decisions or spend a lot of time to learn and execute all these things. So this is obviously the most common method tried by people till now to invest in these types of stocks. But as many people know and are using, smallcase is a quite simple method to invest in
the dividend investing strategies. So today we will talk about
a few such smallcases. But before going into their details, let’s have a quick look at
what a smallcase is. Smallcase is a basket of stocks or ETFs having an investment strategy or a theme. Theme can be, like electric cars, or a government policy, like GST which is beneficial to many comapnies. So there can be a portfolio
based on that theme. Or as I said, investment startegies, like value investing is
an establihsed strategy that was invented by Benjamin Graham and popularised by Warren Buffet. Similarly, dividend investing is also
an established strategy, and there are many smallcases based on it. And today that’s what we will talk about. So, friends, let’s talk about
the first smallcase that is Dividend Aristocrats Smallcase. This smallcase is a portfolio of
those companies that has consistantly increased
their dividend payout and has increased it
over the past 10 years. It is important because
when a company announces dividend, it gives a strong signal to
the entire market and all the investors that their business is doing well, and they have so much profits that
they won’t only expand their business, but can also return some money
to their investors. But when a company increases
its dividend payout, it gives a powerful signal to the market that it is not just doing well,
it is doing so good that it is paying higher dividend to
its shareholders this time. So it makes a positive market sentiment. In fact, sometimes when a company
decreases deividend it make a negative sentiment
for the company as to why it is decreasing the dividend, is there any problem
and the comapny is not going well. All companies and market participants know that decreasing dividend gives
such a negative signal to the market. Therefore, the dividend-paying companies are very careful and considerate
in increasing their dividends because they know that
they can incease it, but it will be very difficult to
decrease it in future. So they increase their dividends
only when they are fully confident that they can maintain it in future. So when you find companies like these that are increasing their dividends,
maintaining it, and are continuously
increasing it further, it is a powerful and healthy signal and is a great strategy
for dividend investing. Based on this philosophy, idea, we have created
Dividend Aristoctars Smallcase. And to create it,
we scanned the whole NSE universe and selected those stocks that has been consistantly increasing
their dividend payout for the last 10 years. As you can see, this portfolio includes
stocks like Bajaj Finance, HDFC Bank that have good track record
of dividend payouts. Now let’s talk about our
second dividend investing strategy. This smallcase is called Dividend Stars. Dividend Stars Smallcase is
a portfolio of stocks of the companies having
high dividend yield and who have never decreased
their dividend amount. So, I have explained earlier in this video what is the importance of
not decreasing the dividends and what are its benefits and why is it important
from the viewpoint of investing. The Dividend Stars Smallcase
combines two things. First is the dividend yield. As you may already know, Dividend yield is very simple
to calculate. It is calculated by dividing
the dividend to the stock price of the company. Let say, if the current share price
of a company is 100 rupees, and they issue a dividend of 5 rupees, then the dividend yield of the company
is 5%. A very simple calculation. It is important because when people see the dividend yield,
they can understand that if they invest an amount,
let’s say 100 rupees, how much amount
they will get back as dividend. Always remember,
when you calculate dividend yield, it is based on your purchase price. Suppose you buy that stock for 100 rupees
and get a dividend of 5 rupees. After 2 years, the price of the stock
of the company rises from 100 to 200
and the dividend rises from 5 to 10. Now, the calculation of the dividend yield
after 2 years will be 10/100, and not 10/200. Thus, your original dividend yield
will rise from 5% to 10%. Always remember,
the dividend yield is always calculated on the basis of your purchase price
if you have already bought the stock. And if you are about to buy it, calculation will be based on
current purchase price. So, the first point was
the high dividend yield. And as I said earlier,
second point is that these companies have never
decreased their dividend amount. So keeping in mind these two points, we have designed this smallcase. And this smallcase has companies
like Tata Chemicals, PTC India, Barmen Lawrie, that have high dividend yield, and have never decreased
their dividend amount. That’s why the dividend yield of
this smallcase is about 2.4-2.5%. And it is almost double,
in fact, it is more than double the dividend yield of NIFTY
which is currently around 1.2%. So the two strategies we just discussed focus only on the dividends. But apart from these two smallcases,
we have created two more smallcases that focus on some fundamental criterias
along with the dividend. Let’s take a look at them. Straight flush Smallcase focus on
those companies that pay dividends as well as
are low volatile and less risky. And Analysts have recently issued
earnings upgrade in them. So, they pay dividends. And Analysts have also upgraded them
in their recommendations. Also, their volatility level is quite low. They are much less risky
compared to other stocks. That was Straight Flush Smallcase. Dividend Smart Beta Smallcase combines dividend investing startegy
and Smart Beta investing startegy. And you may have heard, this strategy has gained popularity
in foreign countries. And it has been recently
launched in India, and many people are implementing it now. So it combines dividend and Smart Beta. This smallcase focus more on
large cap stocks. We work out how to identify and select
the smallcase that is right for you. To do this, first,
you will have to visit smallcase.com. And when you go to the discover section there, you can use the filters or the search box and can see different smallcases,
including those five I have told you about today. Suppose you liked
Dividend Aristocrats Smallcase, and want to know more about it. When you click on it,
you will be directed to its page, and you will see
different types of details, like the risk involved in it, its CAGR, its current and historical performance. You can also easily read the rationale
that I have explained in this video and can learn about
the methodology in detail. You can find all the information
about not only this smallcase but all the smallcases on our platform. But if you want to know
what is right for you, which smallcase you should invest in, then you should first ask yourself why you are following
the dividend investing strategies. Is your goal is to earn dividend income? Then maybe you should
focus on the smallcases that have high dividend income
or dividend yield. Or is dividend a criterion
in your stock selection, while your goal is to invest in
good healthy companies? And as I said, if that is your objective, you can invest in different smallcases
that I have explained to you, like Clash of the Titans,
Straight Flush, etc based on your objective. Another factor is risk. You also have to consider
how much risk you want to take. Some smallcases,
like I said Dividend Smart Beta, focus on large cap stocks. It naturally carries low risk. Some smallcases are mixed. They have small cap, mid cap,
as well as large cap stocks. So their risk level can range from
moderate to high. So keeping in mind all these factors, you can easily choose the smallcase
that is right for you at our platform, and then you can easily invest in it. Thus, you can actualize
your dividend investing strategy. So, friends, I hope you have learned a lot of things about dividends
and dividend investing startegies. If you liked this video, then do like, share and subscribe. And if you have any doubts or questions
regarding dividends, tell us about it in the comment section or you can email us at
[email protected]

18 Replies to “Dividend Investing Strategies || Easily Earn Dividend Income || Stock Market for beginners”

  1. Hello Everyone, Let us know why you invest in dividend-paying stocks? Also if you have any query related to the video. Do ask them out 😀

  2. Government should remove dividend distribution tax. They can make dividend as normal income instead. Now for above 10 lakhs dividend earning people, they are being taxed twice.
    For that reason companies are showing interest in buybacks.
    If we look at Cafe Coffee day, they never paid any dividend. What is the use if the book value is increased.
    One day if a rumourcomes up the market value crashes to 10% or 1% 😥
    I consider dividend as an important deciding factor.

  3. Smallcase being a big brand, I expected them to use English medium so that other non-north Indians could also understand the knowledge.

  4. हिंदी में होने से सबसे बड़ा फायदा यह हे की हम इसे बहुत ही आसानी से समज सकते हे।

  5. U did a great job.
    I like ur every video.
    A big like.
    Subscribed ur channel .
    #PROUDTOBEINDIANAMITCHITKARA

  6. Which is the low risk and high dividend small case, to invest and how much is the minimum investment amounts, thanks

  7. Don't invest in smallcase, loose my money.
    Invest by yourself pick good stocks and make portfolio on your demat account.

  8. Sir mera zerodha demat account he and i am interested in smallcase but my question is smallcase me themes he unke market value of shear as per trading day change hote he ? And second question is divided themes rebalance hote he?

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