Blue Chips Dividend Investing vs Value Investing
Read? Current Dividend Yield is good but avoid falling into potential Dividend Traps (4)
"Less Analyzing. More Investing!" - Createwealth8888
"To make money from the stock market, it is not how well you analyze it. It is how well you invest into it." - Createwealth8888
Blue Chips Dividend Investing is not the same as Value Investing. Value investing is a belief that someone can discover market gems (so-called under-valued stocks) earlier than the rest of players in the stock market. Value investors believe that they have the means to value a stock and determine its margin of safety.
But, the truth is value investing is RELATIVE. The under-valued is PERCEIVED while the market doesn't think so. So it is just an imaginary set of numbers perceived in the mind of a value investor.
Blue Chips Dividend Investing is different. It is ABSOLUTE! Your dividend yield is absolute. You don't need to be a Maths whiz to compute it. The cash you received from stock dividends is real. In blue chips dividend investing, it is less analyzing and more investing. You don't need to attend AGM to find more.
Blue Chips Dividend Investing is simple. You don't need to spend weeks or months to analyze reports and businesses just to buy them.
You only need to understand the following:
- Price is what you paid. Dividend yield is what you get for the price you pay for it.
- High Dividend Yield of at least 6-8%. Past few years of consistent dividend payout or better still an increasing dividend payout.
- Low dividend payout ratio e.g. 50% or below (High dividend payout ratio e.g. 90% or more will easily translate to high dividend yield. It is natural.)
- Dividend Growth (Increasing dividend growth will eventually drive the stock price to settle in at the next higher base price in the subsequent market crashes)
- ROE of at least 12% or more.
Why blue chips?
Check? Blue chips
Why blue chips dividend investing? It is easy! When the blue chip is turning blue-black. SELL!
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Hi CW8888,
ReplyDelete(1)"To make money from the stock market, it is not how well you analyze it. It is how well you invest into it." - Createwealth8888
Excellence! WHY?
i have been trying to practise what you said above since day one. Still analyse a bit lah.
2) "Blue Chips Dividend Investing is not the same as Value Investing".
Here i have a slight twist of idea.
i try to buy in, only after the market has crashed.
At this time most BLUE CHIP DIVIDEND STOCKS are "Value Investing Stocks too". HA! HA! NO?
Only thing it is bearry scary to buy now.
Because all the news/rumours will scare the wit out of you. NO? Ha! Ha!