Due to the recent correction of the stock market, some blue chips shares are giving a high dividend yield. A telco, Starhub now gives a yield of 7%. The media company SPH pays 6.1%. This is the dividend paid during the past 12 months, expressed as a percentage of the current share price.
The stock market has corrected during the past month due to uncertainty in the global economic environment. When the global economy turns bad, the profit of companies are expected to drop. In a bad situation where the profit profit drop by 50%, the dividend yield will still be more than 3%, which is quite attractive compared to bank deposits and bonds.
The share price may drop sharply during a very bad market. But, if you are investing for the long term and does not have borrowings, you can afford to wait for the stock market to ...
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