QUOTE(marketstore @ Apr 23 2013, 08:04 PM)
mine to elaborate how you calculate yield on price and yield on cost..sorry newbie here....
i understand now that to get passive income from dividend..i need to keep it for long term......do people do DCA on dividend stock?
i will be investing post GE although i know it wont make much difference as it is for long term....from the few stocks i saw....... i decided on this strategy...can any sifu comment...
i just want a dividend better than FD rate around 4-6%
so i ll buy stocks which has good dividend history for many years which has been giving at least 4 % dividend per year. then i ll choose from these based on the upwards movement of the stock price..ie graph inclining not declining for the past 3-5 years.....to further consolidate i ll choose stocks which has potential to reach higher ground based on their investment and news headlines...
apa macam my plan sifu??
total dividend/current share price = yield on price
total dividend/cost price bought = yield on cost
Yes there are people dca on dividend stocks, but mostly prefer to buy on dips.
Investing post/pre GE does not matter, what matter is the yield acceptable for you
for higher dividend you need to search out lower ranked stocks, blue chips have very less dividend nowadays
You cannot count 4% per year historically as you have no basis to count as the share price will fluctuate. You have to count at current yield. Then you choose those who has maintained or raised dividend over the years.
Looking at past graph is useless in stock investing. You need to look into the future and gauge if the business will be improving. Investing based on headlines and rumors is another surefire way to end up with the wrong stocks, especially you are into dividend investing and not capital gain.
Since you are so 'green' come back later when you have read some of the following books :-
'The intelligent Investor' by Benjamin Graham.
'One up on wall street' by Peter Lynch
'The little book of investment' by Joey Greenblatt
Otherwise you have zero knowledge and will end up with disappointing results. Investing is not easy, it takes a lot of hard work. So work on it. If you are not even willing to invest 'time' in reading further.. perhaps stock investing is not your cup of tea.
This post has been edited by gark: Apr 24 2013, 05:03 PM