"I want more months filled with dividends"
Ok, let me think aloud and talk to myself again.
My aims:
* I don't like to monitor prices frequently
* I want income every month
* I don't want too much risk
Here's it what I might consider.
Each counter is worth approx $1,000. total portfolio value is approx $13,000.
On the right is the number of shares
sph 200
singpost 600
singtel 250
capitalmall reit 400
frasers ct 400
parkway life 400
capitacom 600
comfort delgro 300
st eng 300
sheng siong 900
suntec 600
uol 200
m1 400
sgx 200
January singtel $17
February Reits sgx $94.9
March singpost $9
April m1 $33
May Reits Comfort St E Sheng siong sph sgx $143
June uol $30
July singpost $9
August Reits singtel singpost comfort shengsiong m1 $160
Sept St E $15
Oct Sgx $26
Nov reits sgx $76.5
Dec sph $26
I added 200 shares sgx to make dividend of 3 of its quarters ($0.05) more meaningful.
I considered roxy and m1 to fix up april dividend, but decided on m1 as it is a larger and more well known company. 4th telco risk is there, dividends might reduce in amount in short-mid term due to competition but long term wise it should be ok.
I have added a solid blue chip uol which pays june every year. ( prefer this to low keng huat or uob kay hian).
I would not worry too much about prices going up and coming down as this is part of normal market functioning. But I would worry if any of them would cut dividends. But i know that even during the GFC, all these companies still pay faithfully. So unless we have something worse than the 2009 GFC, my dividends should be pretty safe.
There are close to 15 counters, so diversification automatically mitigates some risk. Single counter failure is quite unlikely, even if does, the overall effect to my portfolio is even far less.
The purpose of such a portfolio is simply to provide me with income every month, to supplement my current income and in case I lose my job. It might seem a little, but hey, at least we have fresh funds coming in every month.
If this also would keep me awake at night, then I might consider to simply put my money in the bank.
haha, well, I might be kept awake, thinking of what meal to eat with my incoming dividends.......:)
I would try to check on my portfolio at least half yearly.
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really great to be able to receive income every month!
ReplyDeleteThanks for talking to yourself :) I have learnt quite a fair bit whilst eavesdropping on your soliloquy. Appreciate it greatly.
ReplyDeleteyour comments made me feel that my time posting this has been fruitful
Deletethanks!
will post again once i got new ideas
Appreciate your chatting to yourself :) Have learnt quite a fair bit.
ReplyDeleteu are welcomed
Deletewill post again once i got new ideas
Well... all want to have extra income as passive ideally every month. Some thing nice to have. Just by increasing the size when the price dips further is a good way to up the income.
ReplyDeleteyes, indeed, most people including myself, think this is a wonderful plan to have. it will fit in all stages of life, including and especially retirement ages, where we don't want too much risk yet yearn for monthly income during the time we are not able to work anymore.
DeleteThe dividend yield is close to 5%, nice!
ReplyDeleteWith the dividends, continue to reinvest into counters giving dividends soon, am I right?
Lazy Singaporean
yes, correct.
ReplyDeleterisk is low(not zero), but frankly, we all know any of these counters going bust probably means catasphophie anyway.
good hedge against inflation too!
Hope nobody puts it into practice. The transaction cost is high enough to eat into the profit.
ReplyDeleteFor a budget of $13,000, best is to buy just 1 or 2 counters. Recommend Keppel Infrastructure Trust for the stable dividend.
i think what you are suggesting and probably doing yourself is dangerous.
Deletegood luck!
i decided to post this for the benefit of others
ReplyDelete1) we are not talking about trading here. so transaction costs are one off. we are talking about long term investing and not buying now and selling say a few weeks later.
2) buying 1 or 2 counters would be risky to most as if one counter goes bust, that would wipe out 50-100% of all the portfolio.
3) KIT : note that this counter has 2 rights issue in past 7years. if one puts all his capital there, any further rights issue he might have to dip into his savings, which is not desirable to most.
4) eating into profit : we are not talking about flipping for profit. There are no profits to be taken. only dividends as income.
Hi Paul,
ReplyDeleteGood post with good idea as always. Looking at my portfolio I need to increase dividend income in March, April and July. So I am zooming into particular months to steal some idea from you.
Must find time to buy you coffee...
Hi Uncle Sanye,
ReplyDeleteI am humbled by your comments.
March - nam lee. You might want to consider Singpost. Fix March, get July,August and November strengthened.
April - I got Roxy, not sure if it fits your criteria. M1 also fixes this month, but I am cautious because of the 4th telco pending impact. Recent results showed weakness. dividend may get cut.
July - Singpost I guess, but this year it paid in early August instead of July.
Coffee...no problem.. i am sure i got a lot to learn from you too.
taisin also fixes March. Not sure if lum Chang fits your criteria.
ReplyDeleteHi Paul,
ReplyDeleteThough it is good to have dividend income every month, I think it is not a "must have". IMHO, the total dividend in one year is the most important number. My goal is to have it cover my total expenses in one year. If this is reached, I consider I have achieve FI.
I am not in any hurry to buy new stock at this moment. Roxy and Lum Chang were not in my radar before. I will take a closer look on them. Thanks.
yes. that i agree.
ReplyDeleteas we had discussed about this sometime ago, i track my overall cashflow year on year and so far this has been on a steady rise.
i agree that cash flow(which is actually dividend) and the ability to increase cash flow steadily year after year tells a lot about the strength of the portfolio.
Through experience, I found that the more months that dividend came, the more the number of compoundation and hence the faster the increase in dividend level.
We can have dividend 12 months a year, but if the overall dividend per year is the same or does not go up, then something is not right about the strategy.
With your dividend level, I believe you could have reached FI already and working probably is just a choice.
For myself, I don't intend to stop working. Working half the time seems to be a good fitting for me at this point in time.
thanks!
Hi! I really enjoy reading your blog and your posts are very useful. I am new to real investing. I like a buy and hold strategy and reinvesting dividends like you. I don't have much savings (2k+) as I am a 23yr old student. What would you suggest me to start with and any broker you would recommend? I am familiar with CIMB's platform.
ReplyDeleteBest,
Manick
start with blue chips. 2k perhaps can get 1 or 2 counters since lot size is now 100 shares. start building using the dividends received and with new cash injected. increase the counters as u go by.
ReplyDeletei am using kay hian but i guess cimb would be fine, so long as shares are eventually held in your own name and not the brokers'.
regards,
Paul
I will try and start with Blue chips.
ReplyDeleteI need to explore and choose a broker. SCB seems to have the lowest commission and transaction rates. What is the issue if the shares are held by the broker?
Thanks for your kind help!
yeah, i heard SCB has low rates.
ReplyDeleteHeld in custody mean added risk if something bad happens to the broker. though unlikely, this kind of thing we never know. stocks by itself is not without risk, getting it held via broker adds to this
..but this is just my own feeling. I own quite a lot of equities so personally, i don't prefer additional risks for saving on brokerage fees.
I know a lot of people out there who use SCB.
at end of day, its ur call.
just my 2 cents
I would prefer hold it under my name too. Only SCB and another broker holds shares under their custodian account. 2 quick qns.
ReplyDelete1) If I invest 2k and I might get a 4~5% return of $80-$100. What returns should I be targeting in my first few years?
2.1) Should i put my savings for the year(another 2k) + dividends into 2 new counters, each in a different sector?
2.2) If I don't have much savings to top up after a year, I read one of your posts to just reinvest the dividends and don't consider the transaction fees. Is it okay to delay reinvesting by a few mths to pump in ard 500 to 1000?
Really appreciate your help.
hi Manick
ReplyDelete1) 4-5% on 2k is very reasonable expectation. if you have only one counter, in your first few years, provided market doesn't go into another crisis, you should at least gain around 15% based on dividends. capital appreciation will depends on market conditions, because a market slump might cause capital+dividends to go negative even(I hope that doesn't happen too)
however, for longer time frames, we should expect capital appreciation of 4-6% for those good blue chip counters. that together with the dividend yield of 4-5% of counters, with multiple counters which churns out monthly dividends with monthly addition over a long time, average 15% pa plus minus shouldnt be too distant a dream.
Not sure how well this answers your question.
2. yes, 2 different counters
-mitigates risks
-pay out at different times
-grow wealth faster
3. yes, delay of a few months is definitely not a problem, cos who knows, maybe market may go down for you to buy more of that counters. But market may also go up and you end up buying a bit less. when you are young, that few months usually wont make much of a difference.
Thank you so much! May I know which tracker/app do you use to track all the dividends?
ReplyDeleteNo problem.
ReplyDeleteusually i just print out my portfolio from the sgx/cdp account every mth and file it together with my srs statement which comes every mth.
dividend incoming, usually i write it down manually on my calander with a monthly view. will take snap shot with my hp in case i am out of office and want to view it.
i know the above might sound primitive in this day and age.
haha
anyway, develop your own system which you feel most comfortable with..thats abt it.