Saturday, 25 July 2015
Real Lesson on Negative Dividend Yields
Read? China Merchants Holdings Pacific: A Lesson on Negative Dividend Yields
Real People, Real Lesson
Uncle8888's KIT (K-Green) his dividend in specie that was given by Kep Corp in Mar 2011
Over the last five years, he has collected about 40 cts in accumulated dividends; but recently he has returned back all the past dividends of 40 cts plus another 11.5 cts to participate in the right issue of 51.5 cts and put in another 29% of his own capital.
Not negative yield? Then what?
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Hi Uncle CW
ReplyDeleteOn paper, it does look like negative dividend yield, but truth is you are holding more shares now that you can divest and "reclaim" back all those yields back :) It's a reits after all, what does investors expect?
These corporate actions are not for retirees who depend on cash flow from their investment portfolio to fund their living. How many retiree-retail investors are fully aware? How many of them have the extras to keep participating?
DeleteMany of them get excited by loud voices coming from the passive income camp.
How many of us is aware that "more" in the stock market is a double edged sword? Think when the stock price goes South. What happen?
Trust but verify every financial advice or suggestion coming from those who have vested interests.
DeleteComing from retiree like yourself. Good!
ReplyDeleteB, temperament and CW,
ReplyDeleteClassic difference in opinions between those who are going down the mountain versus those who are climbing up the mountain ;)
And between those who have 30 and more years ahead of them so they can think for the long haul, and those who may be thinking how many more years do I have... For in the long run - we are all dead. And what's the point again?
LOL!
temperament,
I'm with you on your point B.
Returns outcome we can't control but we have "financially literate" people who set goals on such consequential outcomes - especially when they are long only investors shooting for relative returns!?
Shh...
Ya. Without this old man here; the financial and investment blog space in Singapore will be dominated by just UP mountain views. Retirees are too much different from wealth builders and no room for any big blunders.
Delete