As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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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

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

Sunday, 11 September 2011

Current Dividend Yield is good but avoid falling into potential Dividend Traps (4)

Read? Current Dividend Yield is good but avoid falling into potential Dividend Traps (3)

How to avoid falling into potential dividend trap?

One of good way is to change your view of looking at dividend yield.

Many income and yield chasing investors tend to view dividend yield in this way. So much focus on high dividend yield e.g. 8-10% and less concern on high dividend payout e.g  90%.  Potential capital appreciation is just nice to have.

How about changing your view to this way?

Primarily focus on potential capital appreciation and dividend yield is just the safety net that provides enough cushion if the stock price doesn't appreciate but fall.

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