Prajna Capital - An Investment Guide

Dividend-FD combo give you handsome return INVESTORS can earn as high a return as 20% per annum by simply investing in shares for dividend and then re-investing those dividends in fixed deposit to earn interest. We made a portfolio of six stocks, which pay higher dividends than the average and then estimated the return —which an investor would have earned if he had invested in these stocks on April 1, 2003, and held on to his investments till April 1, 2009. The reason why we chose April 1, 2003, as the starting point is that the Bull Run was just about to start then and therefore, prices were very low, resulting in high-dividend yield. And today, we have come full circle as there are so many stocks which are beaten to such an extent that the dividend yield is as high as 10%, in some cases even more. The six stocks, which we have chosen are Tata Steel, Varun Shipping, HCL Infosystems, Chennai Petroleum Corp, Graphite India and Allahabad Bank. Assuming that an investor had bought ...