Over the past year, in the face of the intensification of the a** market, the downward trend of risk-free interest rates, and the decline in investment preferences, a "dividend wind" has blown in the market, and the dividend strategy of high dividends and low valuation has quietly become popular, some people regard it as a "stabilizer" in the downward period of interest rates, some people use it as a "ballast stone" to deal with market fluctuations, and some people use it as a "stability anchor" in uncertainty. So why is the bonus strategy so "red"?
This starts with the characteristics of the dividend strategy itself. The dividend strategy, also known as the high dividend strategy, mainly refers to investing in companies that continue to pay stable dividends (dividends). Behind this is the high-quality fundamentals and reasonable valuation of listed companies.
From the calculation formula, dividend yield = total cash dividends Total market value = (total cash dividends Net profit) * (Net profit Total market value) = Dividend rate P/E ratio. Companies with high dividend yields usually have stable cash flows, have a high dividend distribution ratio, and can obtain high absolute returns every year, while the market valuation is low, showing good investment value performance.
As Graham, the "father of analytics", said, dividend returns are the most reliable part of a company's growth, and the market likes to allocate "certainty assets" that can bring stable dividend income. Warren Buffett, the god of stocks, also had a cloud, and doing investment is to share the dividends of the times and slowly become rich with the times. In recent years, the capital market has faced greater internal and external uncertainties, whether it is the US stock market or the A-share market, funds are chasing certainty, and companies with stable fundamentals, high margin of safety, and stable dividends for investors are favored. In terms of A-shares, in the market environment of long-term decline in risk-free interest rates and reduced supply of high-yield fixed income assets, the value of high-dividend asset allocation has gradually been demonstrated, and the "valuation system with Chinese characteristics" has also provided a valuation safety cushion for high-dividend dividend strategies.
From the perspective of the industry distribution of the existing high-dividend assets of A-shares, they mainly involve public utilities, transportation, energy, communications, environmental protection, mass consumption and other fields, and most of them have moat advantages or channel advantages, which provide more choices for high-dividend strategies. It is important to be vigilant to try to avoid falling into the "dividend trap" – high dividends in the past ≠ high dividends in the future. The dividend rate of enterprises in the past is very high, but it does not represent the future, and if the business conditions change in the future, the willingness to pay dividends will also be lower.
Will the dividend strategy that investors care about continue to dominate in the future?From the perspective of supply and demand, the dividend strategy still has long-term development space in the future. From the perspective of supply, the dividend behavior of the A** market tends to be standardized and long-term, which is conducive to the continuous improvement of the dividend behavior of domestic listed companies, and will provide high-quality asset targets for the use of dividend strategies. Focusing on the demand side, with the aging of the population, China's retired and near-retired population continues to increase, and the demand for pension-related investment increases, driving up the demand for stable and low-volatility dividend assets.
In investment practice, the dividend strategy is often used in combination with the low-volatility factor to further enhance the robustness and defensive ability of the strategy. On the one hand, the dividend strategy focuses on the overall quality of the enterprise with a high dividend yield as the standard, and on the other hand, the low-volatility strategy is committed to filtering the abnormal risk of high volatility, which helps to improve the robustness of the portfolio.
On the whole, with the rise of global macro uncertainty, the decline of the domestic risk-free interest rate, the rapid growth of the scale of absolute return funds, and the increasingly perfect domestic dividend system, the long-term allocation value of the dividend low-volatility strategy has become increasingly prominent. For most individual investors, the dividend low volatility strategy is a good long-term allocation strategy, which can be used as a "core" strategy in conjunction with other "satellite" strategies.
Risk Warning: **There is a risk, and you need to be cautious when investing. The above is a personal opinion and is not intended as investment advice.
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