Every investor who enters the stock market wants to receive passive income. Such income can consist of two parts: dividend and exchange rate. Under the exchange rate refers to the profit from the exchange rate differences of assets. But in times of market recessions, it is not always possible to make money on the exchange rate difference. Therefore, for a long-term investor, dividends are insurance, as there is always a chance that the company will pay dividends, even despite a falling market. Of course, there are force majeure circumstances when one or more companies may not pay dividends, such as in 2020, so any portfolio needs to be diversified.
In this article, we will talk about stocks for a dividend portfolio for the next five years. However, it should be borne in mind that over time, the portfolio may change depending on market conditions and changes within the company.
What should you pay attention to?
There are several factors to consider when choosing dividend stocks:
-prospects of the sector;
-the company belongs to the dividend aristocrats.
Global trends indicate that the focus of investors is shifting towards green companies and technologies. Now electric vehicles, renewable energy sources and waste recycling are gaining popularity. Environmentally conscious funds (that is, almost all foreign funds) and investors are increasingly looking at the position of the company in the ESG ratings and the size of the carbon footprint from the release of raw materials.