Hi sifu,
Im newbie to share investment and want to get advise whether it is good to invest on high dividend share and get the dividend yearly instead of buy and sell investment?
Q&A on Stock Market V2, General Question On Stock Market
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 Oct 11 2015, 02:48 PM
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Oct 12 2015, 10:32 AM
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QUOTE(gark @ Oct 12 2015, 09:49 AM) Depending on your risk factor tolerance. And to make sure stock investment will not affect your sleep. Actually I looking at Public Bank and for the past 5 years, the trend is upward. Of course, no guarantee that the share will continue go upward and will not go downward. If really bad luck that the share go down by 50%, I dont think will sell it and will continue to keep for dividend purpose. Lets say IF a $ 50,000 stock investment which you have done all your homework and very confident, plunges 50% in a few days. Will you sell, keep or buy more?  How many percent LOSS can you tolerate for at least 1 year? Without losing sleep? Are you happy with slightly over FD dividend rate of lets say 5% p.a. on your $50,000 investment ie. $2,500 return per year OR do you NEED to earn more? So you feel agitated that your stock has not moved much in over 3 months? Will you sell as the stock price is dead, or will you buy more, as the stock price is still a bargain from when you last bought. Lets say the investment carries a dividend of 5%, paid once a year. Answer some of the questions and we will see your investment style.  My intention is instead of putting it at FD, I looking for high interest return for my deposit. I saw Public Bank dividend on Aug 2015 is 24% and say if I invest 20k, I will get 4.8k return just for the dividend. I hope this is correct. I'm not planning to sell in short period of time and will hold until I really need cash in future. If I have extra money, maybe will buy more for the same share or will look for other high dividend share and keep. Actually I'm fine if the stock not moving up but of course hope it will not go down coz my intention is to get the dividend yearly which I hope it will be at least 8 to 10%. If the share I invest paying dividend just 5%, I dont think I will invest coz the risk is too high and not much different from FD rate. I heard got investor that buy share is to get yearly dividend and keep it for many years i.e. 5/10 years and above. |
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Oct 12 2015, 10:53 AM
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#3
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QUOTE(Pink Spider @ Oct 12 2015, 10:45 AM) Say, u bought PBB shares at RM17.40 Argh.....I'm so naive thought the 24% is the rate of the dividend.....really need to go for share investment course.....U buy 23 lots i.e. 2300 shares...total invested RM40,020 U will get 24 sen x 2300 = RM552 PBBANK declares 2 dividends a year if I'm not mistaken... The other dividend this year was 31% i.e. 31 sen on February 2015 So... 24 sen + 31 sen = 55 sen RM0.55 / RM17.40 x 100% So the annual dividend yield is about 3.16% assuming u bought at RM17.40 Go learn more about fundamentals and principles of shares So basically invest in share is not able to get high dividend lor.....It still need to depend on the share price raise...... |
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Oct 12 2015, 12:03 PM
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#4
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QUOTE(Pink Spider @ Oct 12 2015, 10:58 AM) If u invest for dividends...u have to look for companies that can GROW their profits, so that their dividends will grow too... Managed to get 5 years data from Bursa website.Give u a homework... Find out how much PBBANK shares are selling 10 years ago i.e. 2005 See how much dividends they paid in 2005...2006...2007...2008...til now Do the math and then tell us 2015 Share price : today 18.50 Dividend : 0.24 + 0.31 = 0.55 2014 Share price : ±18.90 Dividend : 0.23 + 0.2777 = 0.5077 2013 Share price : ±16.00 Dividend : 0.2036 + 0.2777 = 0.4813 2012 Share price : ±13.30 Dividend : 0.1851 + 0.2592 = 0.4443 2011 Share price : ±13.50 Dividend : 0.1851 + 0.3054 = 0.4905 Say if I invest on 2011 at 13.50/share and invest on 1000 share, I will get 5000 (18500 - 13500) for 5 years investment = 1000/year for share price increase. Add the dividend each year, 490.50 (2011), 444.30 (2012), 481.30 (20130, 507.70 (2014) 550.00 (2015) = total 2473. 5000 + 2473 = 7473/5 = 1494/year. 1494/13500 = 11% return of investment. Correct??? This post has been edited by kumhoo: Oct 12 2015, 12:16 PM |
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Oct 12 2015, 12:13 PM
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#5
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QUOTE(gark @ Oct 12 2015, 11:34 AM) PBBank is NOT giving you 24% dividend.. more like 3% p.a. only.. But if I keep the share for few years and IF the share go up, the investment can be 10% like the calculation I reply Pink Spider  The 24% means PBBank is giving you 24 sens dividend for EACH share... go calculate yourself lar..  Dividend yearly of 8% and 10% is quite rare for large stable companies unless you are willing to go into very risky companies and or office REIT (that too is a tall order). The only way for you to get those dividend is when you get a massive market crash, where the stocks have fallen 50%-70% or more.. that time do you have the guts to pick up the share? So you think 5% dividend is too low yield for you then, dividend investing is definitely NOT suitable for you. To get better returns, you need to think beyond dividend and short term trading, more like long term holding of good quality returns,.. then maybe you can get your 8%-10% p.a. INCLUDING the dividends.  But no guarantee the share will go up la  |
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