I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down

Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Sunday 13 December 2009

Are High Ratio Dividend Payout Stocks Make A Low Risk Investment? - Part 2


Stocks can have high dividend yield for two reasons:

  1. The company's future earning doesn't seen rosy and investors are valuing it at lower stock price causing the yield to increase temporary and not really attractive to potential investors.
  2. The company is unfamiliar to investors, its price will be a poor reflection of the stock's true value. But, if the company has been around for many years, can the company still unfamiliar to the market?
Dr Michael Leong is a private investor who focuses on investing long term in selected stocks and shares has this advice in one of the chapters in his book: "Your First Million" on buying stocks based solely on "dividend yield" and he doesn't think that is the right way. Capital appreciation is far important than high dividend yield. Go and read this chapter to find out more.

I also love dividend play stocks but I treat the dividend as safety net if the stock price falls temporary but not as a buying decision. Technically on chart-wise, I must see that the stock price has the probability of moving higher before considering it in the watch-list.

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