Indian stock markets are on a continuous rally this year despite few ‘slips and trips’ and have emerged as one of the best performing among the major economies. For the past two months, in spite of the selling pressure from FIIs (foreign institutional investors), the domestic markets have been able to largely hold the momentum. This year has turned out well in terms of record-breaking IPO (initial public offerings) and the benchmark indices clocking newer record highs day after day.
The key equity indices — Sensex and Nifty — have returned in a range of 22-24% so far in this year, widely outperforming the global peers. Nifty 50 also breached the most awaited five-digit figure of 10,000. Amid this heavy gush and rising streak in stock markets, investors seemed to be more curious to explore new avenues and opportunities out of which they can make money. While there are a lot of stock tips and recommendations floating about, have you thought of making money without selling your shares? We bring you two tricks by which you can make money without selling your stocks.
You might very well know that several companies distribute dividends from their earnings but didn’t think of this thing while buying a stock. Getting dividend is as easy as a kid getting monthly pocket money. Most short-term investors make money from gains arising out of from appreciation in the value of share through a stock tip. But earning from dividend distribution can be significant too, if you hold a stock for a stipulated time period. For instance, the world’s richest man — Bill Gates — earns the maximum portion of his income through dividends from the companies which he owns. He earns more than $1 million through dividends every day. In another instance, investing legend Warren Buffett‘s dividend income from top six companies alone in a year is estimated at close to $3 billion. Warren Buffett holds 47 companies in his portfolio, most of which are dividend paying (Read full story).
You can also make a sizeable addition to your source of income through planning your investments in high dividend paying stocks. Some of the companies which have historically paid decent dividends include Indian Oil Corporation — India’s largest company, Hindustan Petroleum Corporation, Coal India — the world’s largest coal maker, Hindustan Zinc, Vedanta, Noida Toll Bridge Company, NHPC and more. The hydropower generation company NHPC paid an interim dividend of Rs 1.7 per share in January this year. Interestingly, the stock of NHPC is available for less than Rs 30 — the current market price of NHPC shares id Rs 27.95.
Interest income on stocks
You might have heard of interest on your money through term deposits in banks and NBFCs but interest can also be earned on your existing stocks. In order to safeguard the risk from short selling, both BSE and NSE have incorporated a platform called Security Lending and Borrowing Scheme (SLBS). This window is very helpful for the investors who practice short selling but do not square off their positions by the end of the day. They are obligated to provide the shares to exchange. Through this platform, various stocks are tendered by other market participants which carry a rate of interest. You can also lend your shares through this window and may end up making decent amount without selling your stocks.