Investing in high dividend yield stocks can be rewarding amid market slump

Consider valuations and earnings growth along with dividend payouts while picking stocks

Dividend yield remains a key parameter that safety-seeking investors consider, while picking stocks during a downturn.

In a bull market, when the Street sentiment is strong, investors typically assign more weight to capital appreciation through higher share prices. However, during a downturn, dividend yield gains more importance.

Investors look at the dividend yield, so as to ensure a certain amount of return on their investment, even if share prices remain subdued. High dividend yields also tend to provide a downside cushion for stocks.

In the current scenario — with uncertainties weighing and indices correcting sharply — investors may consider high dividend yield stocks.

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