As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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, 25 June 2017

Book : Smart Investors Keep It Simple


After more than 17 years, Uncle8888 is still flipping new investment books on NLB book shelves.

This book is for NEWBIES who want to learn about creating passive income with dividend stocks.

It is a simple read and quite easy to understand.

Obviously; many retail investors even those seasoned ones have failed to understand that we shouldn't look at dividend yield alone for investment decision. Never!

We always consider dividend payout ratio and dividend yield as a pair

They are a perfect couple!




4 comments:

  1. Not only " We always consider dividend payout ratio and dividend yield as a pair"!

    Also must consider any possibility of some growth(aka capital gain).

    Example - will you buy HPH now?

    ReplyDelete
  2. "Warren Buffett reveals what's holding him back from putting Berkshire's $90 billion in cash to work"

    ReplyDelete
  3. Hi Uncle8888,

    You forgot 1 very important thing: valuation.
    Even the best growth or income company/Good Class Bungalow becomes a horrible investment if bought at too high a price.

    I'm also presuming that such companies tend to be stable, boring blue-chips providing essential or consumer staple type of businesses, with large barriers of entry to competitors. Since the focus is on long-term (>20 yrs) stable income stream.

    You don't want to end up stressing over the viability of the company whenever there is change in fad, or tech, or business cycles, or need to change strategy every 6 months, etc.

    In the US, besides valuation, investors just need to focus on how many consecutive years of dividend increase. They not just interested whether every quarter got dividend or not. For real dividend companies that can provide long-term income streams, the companies must be able to INCREASE dividends EVERY YEAR.

    For many people, their minimum expectation is 10 years consecutive increase in dividends (Dividend Achievers). Some go for at least 25 years (Dividend Aristocrats). There are companies which have paid out dividends non-stop for 100+ years and have increased dividends annually without fail since WW2.

    After 20+ years, their dividend yield on cost can be 50+%, especially if they also re-invest the dividends in the earlier years of investing.

    ReplyDelete
    Replies
    1. Hopefully Singapore can produce home-grown companies giving this type of dividend growth

      Delete

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