25/04/2016
today's post is not for short term trading.It is for long term investing.(10 to 15 years).
REC is currently trading at 171.It is giving dividend yield of 6.24%.
Similarly there is REC bonds which are giving after tax yield of 7.43%.Note that When we get dividend,It is totally tax free.any gain on share price appreciation will not be taxed.(10 years holding).So,for investor who wishes to put his money in tax free bonds should also think about REC share for investment.
Pros: 1.Generally dividends are stable or increasing in nature.There is very less chances of decreasing dividends.
2.In long term of 10 years,chances of capital appreciation are quite high.In bonds,there is no chances of capital appreciation.
cons:1.In bad times,like 2008,there can be a reduction in dividends.
2.there is a chance of capital erosion.