IRAN vs Israel Conflict & Dividend Investing Strategic Insights and Opportunities

Introduction

In light of recent geopolitical tensions and resultant market corrections, notably influenced by the Iran-Israel conflict, the landscape for dividend investing in India has become increasingly favorable. This detailed analysis provides insights into harnessing dividend yields effectively amidst market volatility, offering a blueprint for investors seeking to enhance their portfolios with dividend-paying stocks.

Market Dynamics and Dividend Opportunities
The global and Indian stock markets have experienced significant corrections due to geopolitical instabilities, presenting unique opportunities for dividend investing. Here’s a detailed sector performance overview:

• Utilities and Energy sectors have remained relatively stable, with companies like Power Grid Infra InvITs offering substantial yields, evidencing the defensive nature of these stocks during market downturns.
• Consumer Goods and Pharmaceuticals have shown resilience, maintaining steady dividend payments due to consistent consumer demand.
• Technology and Finance sectors, despite corrections, continue to offer appealing dividend yields, thanks to robust fundamental growth and cash-rich operations.

These corrections have elevated dividend yields, making it a strategic time for investors to consider these assets for their income-generating potential.

Analysis of Dividend Yields
Dividend yields can serve as a tempting metric for income-seeking investors, especially in the current economic landscape where certain stocks are offering exceptionally high yields in double digits. However, it’s crucial for investors to discern between attractively high yields and those that are potentially unsustainable over the long term.

In the context of the Indian market, amid broad market corrections influenced by global uncertainties like the Iran-Israel conflict, some sectors have particularly stood out for their high dividend yields. Predominantly, companies within the coal and petroleum sectors, as well as certain financial entities and infrastructure investment trusts (InvITs), have demonstrated strong dividend-paying capacities. This is often due to their stable cash flows and regulated nature of income, which allows for consistent dividend payouts even in volatile times.

However, not all high dividend yields are advisable investments. For instance, while the healthcare provider Fortis Malar Hospitals has recorded a staggering dividend yield of 72%, and Xchanging Solutions Limited has shown a yield of 27.33%, these figures, though impressive, require thorough scrutiny. High yields can sometimes be a red flag, indicating potential issues such as a company’s long-term sustainability being compromised for short-term payout attractiveness. These high yields could be resultant from falling stock prices where the dividend amount hasn’t been adjusted accordingly, reflecting underlying company troubles rather than genuine profitability or growth.

When considering investment in such high-yield stocks, especially those with yields significantly above the market average, it is essential to evaluate their dividend payout ratios, the consistency of dividend growth, and the overall financial health of the company. A sustainable dividend payout ratio—typically not exceeding 60-70% for most sectors—suggests that the company is not over-distributing at the cost of its capital needs or future growth.

Moreover, sectors like coal and petroleum are capital-intensive with relatively predictable revenue streams, making them generally reliable for dividends. However, their fortunes are closely tied to commodity prices and regulatory environments, which can introduce variability in their financial performance and, by extension, their dividends. Similarly, financial organizations and InvITs typically distribute a significant portion of their earnings as dividends, supported by their income-generating assets and regulatory frameworks.

In this market environment, where approximately 45 companies (see the image below) have showcased dividend yields of 3.5% and above with substantial market capitalizations of INR 500 million or more, investors should prioritize those entities that have demonstrated consistent financial performance and resilience in dividend payouts. This careful selection will help ensure that investments contribute positively to portfolio yields without exposing investors to undue risk, balancing attractive income generation with sustainable investment growth.

The filtering criteria included market capitalization (above 500 million INR) and recent performance metrics, which help in assessing the impact of market corrections on these yields.

Sustainability of Dividends
Dividend sustainability is a critical factor for long-term income-focused investors. To assess this sustainability, it is essential to look beyond the current dividend yield to the expected or indicated future yields and the consistency of dividend payouts over time. When evaluating Indian stocks for sustainable dividends, especially in a volatile market, investors should closely monitor the indicated or anticipated future dividend yield, often referred to as the trailing twelve months (TTM) yield.

Setting a benchmark TTM yield at 3.5% helps narrow down the selection to companies likely to maintain stable dividends in the near future. Applying this criterion, the number of viable dividend-paying stocks in the Indian market is reduced to approximately 34. This refinement is crucial as it focuses on firms that not only currently offer a high yield but are also expected to sustain these payouts going forward.

Further refinement is achieved by examining the continuity of dividend payments. Companies that have consistently paid dividends for a period ranging from two to ten years offer a more reliable income stream, as this demonstrates their ability to manage capital efficiently and sustain profitability across various economic cycles. When this continuity in dividend payments is factored in, the number of stocks meeting the criteria drops dramatically to just 12 (see the image above). This significant reduction underscores the rarity of finding companies with both high current dividend yields and a proven track record of consistent payouts.

Among these select few, Power Grid Infrastructure InvITs stands out with a robust dividend yield of 13.71%, showcasing its exceptional ability to generate and distribute cash to shareholders consistently. This yield is particularly compelling, considering the stringent criteria applied, which emphasizes the firm’s strong financial health and operational efficiency.

To ensure dividend sustainability, investors must delve deeper into each company’s financials, examining payout ratios, free cash flow, earnings stability, and sector-specific risks. A sustainable payout ratio—typically below 70%—ensures that the company retains enough capital to fund future growth and operational needs while still rewarding shareholders. Analyzing these factors holistically provides a clearer picture of whether a high dividend yield is genuinely sustainable in the long run or if it poses a risk of future cuts.

In summary, for dividend sustainability in Indian stocks, focusing on indicated yields and historical payout continuity offers a prudent strategy to identify genuinely robust dividend stocks. This approach not only captures the current income potential but also safeguards against the risk of future dividend reductions, ensuring that investments remain viable and productive over the long term.

Tax Considerations in Dividend Income
When it comes to dividend investing, understanding the tax implications is crucial for optimizing the after-tax return on your investments. Here are the key tax considerations you should be aware of regarding dividend income:

1. Dividend Distribution Tax (DDT) Abolishment

Historically, in India, companies were required to pay Dividend Distribution Tax (DDT) before distributing dividends to shareholders. However, the Finance Act of 2020 abolished DDT, shifting the tax liability from companies to the shareholders. This means that dividends are now taxed in the hands of the investors at their applicable income tax rates.

2. Taxation of Dividend Income

With the abolishment of DDT, dividend income is added to your total income and taxed according to your individual tax slab rates. For instance, if you fall into the 30% tax bracket, your dividend income will also be taxed at 30%. This change makes it imperative for investors, especially those in higher tax brackets, to plan their investments considering the tax on dividends.

3. TDS on Dividend Income

As per the revised tax regulations, companies and mutual funds are required to deduct tax at source (TDS) at 10% on dividend payments exceeding INR 5,000 in a financial year. It is important for investors to provide their Permanent Account Number (PAN); otherwise, the TDS rate will be higher at 20%.

4. Advance Tax Liability

Investors receiving dividend income are required to consider this income while calculating their advance tax liability. If the total tax on your estimated income, including dividends, exceeds INR 10,000 per year, you must pay advance tax in installments. Failure to comply can result in interest under sections 234B and 234C of the Income Tax Act.

5. Tax Relief for Non-Residents

Non-resident investors can benefit from the Double Taxation Avoidance Agreement (DTAA) between India and their resident country. The DTAA often provides lower tax rates or beneficial terms to avoid double taxation on the same income in two countries. Non-residents should review the specific provisions of the DTAA and ensure proper documentation to avail these benefits.

6. Dividend Stripping

The Income Tax Act has specific rules to curb dividend stripping, a practice where an investor buys shares before the dividend declaration and sells them after receiving the dividend, primarily to avail tax benefits. The tax rules prevent investors from claiming losses related to such transactions to the extent of the tax-free dividend received.

7. Form 15G/15H for Lower/Nil TDS

Senior citizens and investors whose income is below the taxable limit can submit Form 15H (for senior citizens) or Form 15G (for others) to ensure no TDS is deducted on their dividend income. This is particularly useful for investors who do not have a taxable income and want to avoid the hassle of tax refunds.

Understanding these tax considerations can significantly impact the net return from your dividend investments and help in making more informed financial decisions. Always consider consulting with a tax professional to understand the current tax laws and optimize your tax liability based on your specific financial situation.

Dividend Growth
When investing for dividend income, it’s not just the current yield that matters but also the growth in those dividends over time. Ensuring dividend growth is crucial as it helps in protecting the purchasing power of your investment against inflation and can indicate a company’s strong financial health and a commitment to returning value to shareholders.

For a dividend investment strategy to be effective, selecting stocks that not only pay dividends but also consistently increase them is essential. This approach leads to an appreciation of income alongside potential capital gains. For our analysis, we focused on Indian stocks that have not only maintained but also increased their dividend payouts consistently over the last two years.

Shortlist of High-Performing Dividend Growers

From our comprehensive screening, we distilled the list down to three prominent stocks showing robust dividend growth:

1. Power Grid Infrastructure InvITs: This stock stands out with a dividend yield of 13.1%, making it an attractive choice for income-seeking investors. Its consistent performance in increasing dividend payouts highlights its operational efficiency and stable cash flow generation.
2. Chennai Petroleum Corporation Limited: With a yield of 5.98%, Chennai Petro has demonstrated financial stability and commitment to shareholders by steadily increasing dividends. This is reflective of the company’s strong position in the oil refining sector and its ability to manage operational challenges while sustaining profitability.
3. Morarka Finance Limited: Although offering a lower yield of 3.8%, Morarka Finance has shown commendable growth in its dividend distributions, which may appeal to conservative investors looking for steady income with lower volatility.

Additional Noteworthy Performers

Further analysis reveals additional stocks with significant dividend growth, albeit with a more lenient criterion on the consistency of dividend growth:

• Jagran Prakashan Ltd: This firm has delivered a 5.4% yield with an impressive increase in dividend per share growth of 25% in the last year. It exemplifies a potential hidden gem in the small-cap space where growth can often go unrecognized by the broader market.
• Mindspace Business Parks REIT: This real estate investment trust offers a 5.26% yield and has seen an extraordinary dividend per share growth of 288.75%, underscoring its strong rental income streams and effective property management strategies.

Investing in companies with a record of growing their dividends can provide investors with a rising income stream and potential capital appreciation. The companies listed exemplify strong financial discipline and shareholder-friendly policies. Investors should consider these stocks within a diversified portfolio to mitigate risk and enhance returns. The key is to balance high yields with sustainable growth to ensure that dividends continue to provide income over the long term.

Economic Factors Influencing Dividend Stocks

Economic factors are foundational to any investment strategy, particularly in the realm of dividend investing. Understanding the interplay between inflation, interest rates, and corporate profitability is crucial for identifying viable dividend opportunities, especially in volatile global contexts such as the ongoing Iran-Israel conflict. However, for the purpose of this analysis, we’ll focus purely on economic indicators and their implications for dividend stocks, setting aside geopolitical risks for a more controlled examination.

Inflation

Inflation significantly influences dividend-paying stocks. In an environment with controlled inflation, typically around or below 4% as currently observed, companies can maintain or increase their profitability without the need to excessively raise prices. This stability allows companies to manage costs effectively and potentially increase dividend payouts. For investors, particularly foreign ones, this creates an opportunity to invest in companies that can sustain or grow their dividends without eroding real returns due to high inflation.

Interest Rates

The trajectory of interest rates is another critical factor. With global central banks, including the Reserve Bank of India, likely to lower interest rates in response to stable or declining inflation, borrowing costs for companies may decrease. Lower interest rates reduce the cost of debt, freeing up additional capital that can be returned to shareholders through dividends. Moreover, lower interest rates make dividend-paying stocks more attractive relative to bonds, as the income yield on stocks becomes more competitive against the fixed income from bonds.

Corporate Profitability

As economic activity is bolstered by lower interest rates and controlled inflation, companies are likely to see improved profitability. This profitability often translates into higher disposable income for these companies, which can then be distributed as dividends. The direct correlation between a company’s profitability and its ability to pay dividends is a critical consideration for dividend investors. In the current economic climate, as companies navigate through reduced costs and improved market conditions, the potential for increased dividends is tangible.

Market Entry Price

For dividends to be a fruitful component of an investment portfolio, the entry price of the stock is paramount. The current market corrections, driven by broader economic uncertainties and not necessarily by fundamental weaknesses in the companies, have led to lower stock prices, thereby elevating dividend yields. This presents an attractive entry point for investors, where the price paid for stocks is justified not only by the potential capital appreciation but also by the higher income generated through dividends.

In summary, the confluence of controlled inflation, declining interest rates, and resulting corporate profitability creates a conducive environment for dividend investing. For investors, particularly those from overseas, the ability to enter the market at a lower valuation is crucial. It ensures that the yields received are substantial and that the investments have room for appreciation in value, potentially leading to both income and capital gains. In such a scenario, dividend stocks not only offer immediate income but also promise growth, aligning with long-term financial goals amidst economic stability.

Risk Management in Dividend Investing

In the domain of investment, risk management is crucial, particularly when constructing a portfolio with a significant focus on dividend income. Investors must carefully balance their quest for immediate income with the long-term growth potential of their investments to ensure financial stability and growth. Here’s a detailed exploration of risk management strategies in the context of dividend investing:

Proper Asset Allocation:
Effective risk management starts with diversification through proper asset allocation. This strategy helps mitigate risk by spreading investments across various asset classes, sectors, and geographies. For dividend-focused portfolios, it’s essential to ensure that the allocation to dividend stocks is balanced with investments in other areas such as bonds, real estate, or growth-oriented equities. This diversification helps protect the portfolio against sector-specific downturns and provides growth opportunities from different market segments.

Evaluating Dividend Sustainability:
Investing in companies solely because they offer high dividends can be misleading if their dividends are not sustainable in the long run. Investors should look beyond the dividend yield and assess the dividend payout ratio, which indicates the proportion of earnings paid out as dividends. A payout ratio that is too high, especially if it exceeds 100%, may not be sustainable as it suggests the company is paying more in dividends than it earns, which can lead to future cuts in dividend payments.

Assessing Company Fundamentals

Profitability and Cash Flow Analysis:
A company’s ability to maintain and grow dividends significantly depends on its profitability and the generation of robust free cash flows. An investor should evaluate whether a company’s net income and free cash flows are stable or increasing. Stable or growing free cash flow is a good indicator of a company’s ability to sustain dividends since it reflects the actual cash available after all expenses and capital expenditures.

Avoiding Dividend Traps:
Sometimes, companies may maintain high dividends even when they face financial difficulties, using dividends to attract investors. Such scenarios often lead to what is known as a ‘dividend trap’ where the allure of high dividends masks underlying financial problems that could lead to dividend cuts in the future. This is especially risky if the company is funding dividends from existing cash reserves rather than from generated earnings. Continual assessment of the company’s earnings quality and the sustainability of its cash flow is paramount.

Strategic Considerations

Growth vs. Income:
Investors should align their dividend investing with their overall financial goals. If the primary goal is income, selecting companies with a history of stable and growing dividends is ideal. However, if portfolio growth is equally important, it is crucial to balance high-yield dividend stocks with growth stocks that may offer higher potential returns through capital appreciation.

Sector and Company Selection:
Choosing the right sectors and companies is vital for risk management in dividend investing. Sectors like utilities, real estate (through REITs), and consumer staples often offer higher dividend yields with less volatility compared to tech or cyclical industries. Within these sectors, focus on companies that have a strong competitive position, stable earnings, and a history of dividend growth.

Long-term Perspective:
Dividend investing should be approached with a long-term perspective. Short-term market fluctuations can affect stock prices and yields, but a long-term focus allows investors to ride out volatility and benefit from compounding dividends over time.

Effective risk management in dividend investing involves a judicious blend of sound asset allocation, meticulous analysis of dividend sustainability, and strategic company selection. By focusing on companies with robust financial health and a reliable dividend history, investors can effectively manage risk while enjoying a steady stream of income.

Diversification across sectors and ensuring investments in companies with strong financial health are key to managing risks associated with dividend investing. The strategic allocation should consider not only the dividend yield but also the overall market positioning and sectoral health to mitigate potential downturns.

Portfolio Allocation Strategies

Investing for dividend income is a strategic decision that aligns with the long-term financial goals of generating steady income while preserving capital. However, effective portfolio allocation is crucial to ensure balanced exposure and mitigate associated risks. Here’s a detailed guide on how to structure an investment portfolio emphasizing dividend-paying stocks, tailored to individual financial goals, risk tolerance, and investment horizon.

Balancing Dividend Stocks with Total Portfolio

Diversification across Asset Classes:
It’s paramount for investors to diversify their portfolio across various asset classes to reduce risk and optimize returns. While dividend-paying stocks offer a reliable income stream, they should be complemented with other investments like bonds, fixed deposits, and mutual funds. These instruments provide stability and can act as a buffer during market volatility. For a well-rounded portfolio, dividend stocks might typically comprise 30% to 40% of the equity allocation.

Limiting Exposure to Dividend Stocks:
Although dividend stocks are attractive for their potential to generate income, over-reliance on any single income source can lead to increased risk, especially in sector-specific downturns or broader market corrections. Capping the dividend stock allocation to about 40% of the equity portfolio ensures that investors also benefit from capital appreciation in non-dividend stocks, which can contribute to overall portfolio growth and provide liquidity when needed.

Considerations for Portfolio Allocation

Investment Horizon and Financial Goals:
The allocation towards dividend stocks should align with the investor’s financial horizon and goals. For retirees or those nearing retirement, a higher allocation towards dividend-yielding stocks might be appropriate due to their immediate income needs. Conversely, younger investors with a longer time horizon might focus more on capital growth potential, thus possibly allocating a smaller portion to dividend stocks and more towards growth-oriented equities.

Risk Appetite:
Investor risk tolerance is another critical factor in determining the extent of investment in dividend stocks. Those with a lower risk appetite might prefer the stability offered by high dividend yield stocks, whereas more aggressive investors might limit their dividend exposure in favor of potentially higher returns from growth stocks and other asset classes like real estate or commodities.

Market Conditions and Economic Outlook:
Market trends and economic indicators should also guide the allocation strategy. In a bull market, reducing reliance on dividend stocks to capitalize on capital gains might be beneficial. In contrast, in a bear market or during economic uncertainty, increasing the allocation towards stable, high-dividend-yielding sectors like utilities or consumer staples can provide safer returns and reduce portfolio volatility.

Tactical Approaches to Allocation

Regular Portfolio Reviews:
Regularly reviewing and rebalancing the portfolio is essential to maintain the desired level of risk and alignment with changing financial goals and market conditions. This may involve adjusting the proportion of dividend stocks in response to life events, economic shifts, or significant changes in financial circumstances.

Sector Diversification within Dividend Stocks:
Within the equity component, ensure diversification across various sectors that traditionally offer dividends, such as utilities, real estate (through REITs), telecommunications, and energy. This mitigates the risk of sector-specific shocks that could affect dividend payouts.

Use of Dividend Growth and High Dividend Yield Strategies:
Incorporate a mix of high dividend yield stocks for immediate income and dividend growth stocks that offer potential for increased payouts over time. This approach not only provides current income but also capital appreciation and protection against inflation.

Conclusion

A strategic allocation to dividend-paying stocks within an equity portfolio should be carefully considered against the backdrop of an investor’s overall financial landscape, market conditions, and personal risk tolerance. While dividends can significantly enhance income and provide stability, they should not overshadow the importance of diversification and the potential for growth through other investments. By carefully structuring their portfolio, investors can enjoy the dual benefits of steady income and capital appreciation, ensuring financial security and growth over the long term.

Comparative Analysis with Long Term Bonds

In today’s financial landscape, marked by geopolitical uncertainties and evolving economic policies, investors face a crossroads in choosing between equity dividend stocks and long-term bond investments. Each investment avenue offers unique benefits and risks, particularly in the context of recent rate cuts by the U.S. Federal Reserve and anticipated reductions in Indian interest rates. This comparative analysis will explore these options to aid investors in making informed decisions that align with their financial goals and risk tolerance.

Overview of Current Market Dynamics

1. Falling Interest Rates: Interest rate reductions have a profound impact on both equities and bonds. The U.S. Federal Reserve’s policy and similar expected moves by the Reserve Bank of India are likely to lead to lower borrowing costs, potentially stimulating economic growth and equity market valuations. Moreover, these rate cuts are also pushing up bond prices, particularly in long-duration bonds, resulting in appealing capital gains for bondholders.
2. Bond Market Response: The bond market has reacted to lower interest rates with increased yields on long-term securities, presenting lucrative opportunities for fixed-income investors. Long-term bonds, particularly government securities (G-Secs) with durations between 8 to 30 years, have seen yield spikes, offering double-digit returns in some cases. This makes them an attractive option for those looking for steady income combined with the potential for capital appreciation due to further rate cuts.

Equity Dividend Stocks versus Bond Investments

Equity Dividend Stocks: Investing in dividend-paying stocks is traditionally viewed as a dual-benefit strategy—providing steady income through dividends and potential capital appreciation. However, these stocks can be volatile, dependent on market conditions and company performance. For active investors, short-term market spikes may offer significant gains, making equities an exciting, though riskier, avenue.

Long-Term Bonds: Conversely, long-term bonds offer a more stable investment option, with less volatility compared to stocks but with appealing yields in the current economic climate. They are particularly suitable for passive investors or those with a lower risk tolerance, who prioritize income stability over high-risk capital gains. The extended durations of these bonds align well with long-term financial planning, offering predictable returns that can be more appealing amid economic uncertainty.

Risk Management and Portfolio Diversification

Investors must consider their ability to manage the inherent risks associated with each option:

• Equity Risks: Dividend stocks are susceptible to market fluctuations, company-specific news, and broader economic changes, which can affect dividend payouts and stock valuations.
• Bond Risks: Long-term bonds, while generally stable, are subject to interest rate risk and inflation risk. As rates drop, bond prices rise; however, this can reverse if rates unexpectedly increase, potentially leading to capital losses.

Strategic Allocation Based on Investment Goals

The choice between dividend stocks and long-term bonds should align with the investor’s financial goals, risk appetite, and investment horizon:

• Growth-Oriented Investors: Might lean towards dividend stocks for their potential upside in capital gains and active income generation.
• Income-Focused Investors: May prefer the safety and steady income stream offered by long-term bonds, especially in a falling rate environment.

The decision to invest in dividend stocks or long-term bonds should not be exclusive but rather complementary, forming part of a broader diversified investment strategy. Balancing between the two can hedge against market volatility and economic downturns, providing both growth and income while managing potential risks effectively. In times of geopolitical and economic flux, a well-considered allocation that includes both asset types can optimize returns and safeguard investments against unforeseen market movements.

Future Outlook and Strategic Recommendations

In the immediate future, markets are experiencing heightened volatility primarily due to geopolitical tensions, notably the Iran-Israel conflict. Such environments historically create fluctuations in stock prices, presenting both challenges and opportunities for investors, particularly those focused on dividend yields.

Short-Term Volatility and Investment Strategy

The current geopolitical instability is likely to cause significant market swings, but these can be advantageous for savvy investors. The key is to leverage this volatility to secure high-yield dividend stocks at lower prices. Buying during dips not only enhances the yield obtained relative to the investment but also improves the margin of safety for investors, reducing the risk of significant losses in equity value.

Locking in Dividend Yields at Optimal Prices

During periods of market turbulence, dividend-paying stocks can sometimes be undervalued. Investors aiming to maximize income should consider this an optimal time to purchase such stocks. The lower acquisition costs not only ensure higher relative dividend yields but also provide better capital protection against further market downturns.

Medium to Long-Term Market Outlook

Once geopolitical tensions ease, particularly after the resolution of the Iran-Israel conflict and the forthcoming U.S. elections, markets are expected to stabilize. Post-conflict, with anticipated global rate cuts—including in India—there is a strong likelihood of sustained growth in equity markets. Such an environment typically sees a decrease in dividend yields as stock prices rise, which might reduce the attractiveness of dividend investing compared to periods of higher volatility.

Investment Considerations for the Future

Investors should remain vigilant in the short term and ready to act on opportunities presented by the market drawdowns to lock in desirable dividend yields. Looking forward, the strategy should adjust to a more stable market, where capital appreciation might take precedence over dividend yield as the primary investment goal.

In conclusion, the future outlook for dividend investing is twofold: exploit the current market volatility to secure high-dividend stocks at bargain prices and prepare for a shift in strategy once the market stabilizes post-geopolitical events. Investors must remain adaptable, responsive to market conditions, and proactive in portfolio adjustments to navigate through these changing dynamics effectively. This proactive approach will ensure not only stable income through dividends but also position portfolios for potential capital gains as markets recover and grow.

Conclusion
Dividend investing in India currently presents a compelling opportunity for investors seeking stable and high income. Through careful selection based on yield sustainability, tax considerations, and economic factors, investors can effectively enhance their portfolio’s income potential while managing associated risks.

Disclaimer
Investments are subject to market risks, including the loss of principal. Investors are advised to perform their own due diligence or consult financial advisors before making investment decisions.