yes...yes...pink spider......

While I'm not sure about your dad situation, but I can understand, that typical of many Malaysians parents since quite a large number of them have blown away their EPF savings early and now have to rely on their kids for support. Lucky for me, I don't have that problem nor will I get into this situation later on when I retire.

If your responsibilities are household bills/groceries, those are probably mandatory spending that you can't avoid,
but the important thing is, did you increase your saving rate? If not, your income must increase otherwise inflation will kill it over time.

Get into those high quality investment and divi incomes like Divi Warriors..
Little by little, it will definitely pay off over time.

Of course my saving rate have increased, from puny 10% when I first started working to about 25% now

Yes I'm readying my war chest to buy into some divvy stock now

Anyway, back to topic. I've observed that there are quite a number of smaller cap consumer counters that are delivering decent yields, Institutional Fund Managers usually don't look at those?

My hero....swoon

Xuzen

Generally they are too illiquid for fund managers which resulted they may have difficulty to buy and sell, so normally, won't in fund manager list.

Some small cap, even for retailers (with just slightly more volume/appetite one) also hard to trade upon. Big price gaping on buyer and seller, little buyer/seller shown up each day etc.

If that's the case, won't they represent good value for buy-and-hold-for-dividend retail investors?

Illiquid to trade big, doesn't mean it is not good value.

As you mentioned buy and hold, means one get rid of most sell side of issue, it is all about the company can deliver the profit by then as handsome dividend.

There are mixed bag performance on those small cap, from experience/history.

Illiquid just means it is not as easy to trade upon or when one to sell or buy quickly in big lot.
While illiquid means fund managers generally won't have much interest, means price wise can be more easily dictated by small lot/volume that a small volume already can push up/down the price.

Thanks cherroy

historically it is better to invest in growth oriented stocks and not income based stocks/funds. we are in for profit in stocks. for example if stock A gives you 6% dividend each year, but falling 10% each year, it negates the purpose of 'investing' in the stock. as for more reliable passive income, real estate is a better option. the safest is fixed deposit for sure..

historically?
not everyone goes into stocks merely for capital gain.
and if you find a stock that gives 6% div each year, more than likely you wont find it falling by 10% in value each year

TECNIC's price was over RM4.00 before its last ex-date, giving a DY of more than 6%. Bu the price keeps dropping after the ex-date. Yesterday it closed at 3.16.
And, it has not been doing well in the last few quarters, so I doubt the price will rebound to 3.50 any time soon.
If its gives a dividend of 18 sen/share this year, the DY will again be more than 6%. But that's a far cry from last year's 25 sen/share.

Sadly, I am one of the investors who got burnt (already cut loss)

This post has been edited by river.sand: Feb 20 2013, 08:59 AM

For dividend stocks.. you need to look for dividend growth.. & dividend raise consistency. No point investing in a stock which gives higher then lower dividend each year, and the share price will reflect the disappointment. Also if dividend is more or less the same year after year, you are not beating inflation. If a stock can consistently raise dividend year after year, there will be no worries on the stock price as it will follow suit. Usually these are very strong, cash rich companies, which can withstand any recession and can still pay out good dividend.

Dividend growth investing - best combination of dividend and growth stocks investment.

This post has been edited by gark: Feb 20 2013, 11:09 AM

FD for sure cannot catch up with inflation in the long run.........

Might be the safest way to lose some value for the money u hold.

That is why asset allocations come about , the reasons why u would say Yes to one over the other

This post has been edited by SKY 1809: Feb 20 2013, 12:41 PM

anyone who goes into the stock market must think like a businessman, where the cost price is the price of purchasing the raw material, and with hard work, getting a good positive return in the long run. more often than not, buying a stock which has high dividend rate does not have good potential for upside. by the way, knowing what the general market is doing is also very important, as 3 out of 4 stocks will follow the general market trend. its likely that the high dividend stock will drop by 10% in the bear market too.


usually companies which give out high dividend do so to sustain the stock price, but we are in the stock market to make better profits, and growth stocks are better. as for dividend rate, usually it should be capped at buying dividend rates at or below 3%.

this in the very end depends on the risk tolerance and the age of the investor. an investor who is more comfortable with dividend paying stocks should allocate more in cash, FD, bonds. good asset allocation would also include REIT, real estate and enough (enough to be able to sleep soundly at night) in growth oriented stocks/funds.

its very important to do the homework to know what the market is doing, esp in the bond market, real estate and whichever stock exchange we involve in. and work on knowledge with knowing our own trading emotions, fundamental analysis and technical analysis.

its good to read some of the classic investing books by investing legends, eg jesse livermore, richard wyckoff and william j o'neil.

This post has been edited by paintballtao: Feb 20 2013, 01:16 PM

Beg to differ on those highlighted with red.

1) If one who knows how to pick up good Dividend stocks, moving back money into Cash, FD or Bonds looks quite funny or rather reflects the insecurity of a person aka investor ( if without any good specific reasons given )

2) Not all Bonds are on par with one another , many junk bonds around since century ago. Not all Euro country bonds are on par with each other. Even Mini bonds issued by Ang Mo bank could go under water.

3) Asset Allocations do recognize some economic situations, like improving or deteriorates ...not because Bonds, FD are better and vice versa...........BUT rather situations based decisions , Goals , risk factors , age plus plus.

4) Your discussions are generally theory based , plugged from somewhere maybe textbooks or so .

Just my views only.

This post has been edited by SKY 1809: Feb 20 2013, 02:19 PM

I think you might not understand the term dividend growth. Lets say you buy a company share at RM 1 with dividend of 4c per year, that's 4% DY right?

The company continue to increase the dividend rate by 1c per year (dividend growth) at end of year 6 the dividend is now 10c/share. So your yieldbased purchase cost is now 10%.

But since the market sees increased dividend and revalue to share at 4% DY (based on current yield), then the share will be worth RM 2.50 to justify this yield.

Even if the share price drop temporary during recession, as long as these company continue to increase dividend year on year, the share price will be reflected sooner or later. While you sit it out, just collect the dividend lar.

Of course all the above is just an example, but there are lots of real life examples of the above such as dutch lady, nestle, GAB, Digi etc etc Internationally will be coca cola, J&J, etc

This post has been edited by gark: Feb 20 2013, 02:11 PM

So much talk about growth stock is better than dividend stock, while forget that stock can make you a loss even after 10 or 20 years, and some worst one being delisted as well.

How many previously classified as growth stocks that varnish from the market?

A loss in the stock market may need 5 or 6 gain to just breakeven back.

Rothmans/BAT has been known as high dividend rate stock even 20 years ago, so no good potential for upside?
Last time Rm1x.xx only, now RM5x.xx with with tons of cash dividend pocketed by the shareholders each year.

While a famous ABCD growth stock that was Rm3.00, now barely Rm2.00, after 20 year.

Im planning to invest about RM20K but i lack any experience in stocks or REIT. I heard about Berjaya Sports Toto and am interested because of the low stock price and the dividends per annum.

Is this a good investment? Are there any better stocks or REIT which give better returns? Im not a high risk investor.