Dividend Investing is a method of buying stocks that pay regular dividends to its shareholders. This strategy is normally used by risk-averse investors. In the event of a decline in stock prices, dividend income can be used to mitigate or offset capital loss. For example, you own a stock that pays 2.5% dividends per share. The stock price is Rs 50. Thus, you will receive Rs 1.25 (2.5%*50) dividend per share. Assuming that you own 1000 shares, total dividend that you will receive is 1000*1.25 = Rs 1,250.