The Basics of Dividend Investing

This time, I'd like to talk about dividend investing.

For those of you interested in stock investing, have you ever heard the term dividend stocks?

Dividend stocks are, as the name suggests, stocks that consistently pay dividends.

So what are the advantages of investing in dividend stocks?
The biggest advantage is stable cash flow.
If you invest in growth stocks, you can earn large profits from rising share prices, but you also have to accept the risk of large declines.
Dividend stocks, however, let you earn steady income through dividends. Of course, the share price gains will likely be lower than those of growth stocks, but the downside risk is lower as well. In this sense, dividend stocks can be said to offer relatively good returns for the risk taken.
Another advantage is that you can enjoy the compounding effect by reinvesting your dividends.
When you receive dividends, you can use that money to buy additional shares. When compounding works this way, you can grow your assets even more over the long term.

Of course, dividend stocks also have disadvantages.
The major drawback is a relatively low rate of share price growth.
In return, you receive steady dividends.
That's why dividend stocks can be seen as better suited to long-term investing.

So which stocks should you choose?
1) Companies with a high dividend payout ratio and sound financial health are good choices.
2) You should also consider the company's business outlook and growth potential.

Dividend stock investing can be an attractive choice for investors seeking stability.
These days, you can also invest in dividend stocks through ETFs (exchange-traded funds).
If picking individual stocks is difficult, investing in a dividend ETF is also a good option. However, you should always select stocks carefully and manage your portfolio.

If you're interested in growing your money, consider giving dividend investing a try.
You can catch two rabbits at once: steady dividends and gradual share price growth.

< Top Stocks by Market Dividend Yield, 2023 >

Rank Stock Name Dividend Yield Dividend per Share
1. Yesco Holdings 25.8% 8,750 won
2. Inhwa Precision 19.1% 2,250 won
3. Hanyang Securities 1st Pref. 13.6% 1,700 won
4. CR Holdings 12.5% 820 won
5. NH P... 11.8% 531 won
6. Creverse 11.1% 2,000 won
7. Jungdawn 10.7% 300 won
8. Hankook Shell Oil 10.3% 25,000 won
9. Mastern Premi... 9.5% 305 won
10. Daishin Securities 1st Pref. 9.2% 1,250 won