I’m a 25 year old and I just started working. I have 12k saved and plan to save 1K per month. I have no knowledge about investments and I been reading on this site. Would you advise that I buy DBS shares and keep for dividends? - Seedly
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Anonymous

Asked on 07 Jul 2020

I’m a 25 year old and I just started working. I have 12k saved and plan to save 1K per month. I have no knowledge about investments and I been reading on this site. Would you advise that I buy DBS shares and keep for dividends?

I’m not sure how they give them out and the fees involved in stock purchasing. Or would you suggest I go into RSP?

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There was an article somewhere on seedly about this guy who only bought HSBC shares. In 2020, his plan went up in flames as his capital went downhill, and dividends got cut.

I would avoid concentrating on one position as that will leave you open to concentration risk. Instead, rsp into an index fund/bond mix if you are risk-averse.

https://www.ejinsight.com/eji/article/id/1498330/20170223-a-taxi-driver-retires-at-33-after-amassing-40000-hsbc-shares ​​​

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Read a lot

be careful with finance professional advizors

do not buy single stocks or unit trusts but globally diversified passive stock indexing ETFs

https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy

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Patrick

Patrick

Level 2. Rookie

Answered 5d ago

Instead of heading into stocks directly which will required you some basic analysi. I will suggest you to look at Robot investor such as StashAway and syfe and set aside a comfortable amount to invest through them or buy funds as they are actively managed and reacts fast than etf

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I would suggest that if you do not know much about investments, avoid individual stocks and learn more first.

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Hello,

Investing purely in DBS means you are exposed to its price volality, it remains one of the main risks even if you dca on it. You should buy a couple of companies (dbs + other co. from other industries) and make dbs your main company (since you like it).

Or you can buy index funds that tracks the different indexes like s&p 500, nasdaq & STI.

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Would advise you to check out S-REITs (Singapore REITs). By law, they are required to distribute 90% of their earnings to the shareholders as earnings, hence the high dividend yield. Our local banks are not considered REITs, hence they do not need to pay out their shareholders and can change the percentage of their earnings to be distributed at any time. Recently, the three local banks just changed their dividend to be capped at 60% earnings. Meanwhile, REITs are still paying out 90% earnings as always. Therefore, REITs would be a better option when it comes to dividends as it provides a more stable income flow of dividends.

(Hint: You can also tell the difference in dividend yield potential by looking at the difference of the dividend yield between the STI ETF (G3B/ES3) and REIT ETFs (CFA, CLR, Philips Dividend Leaders)

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PL

Patrick Lok

Level 2. Rookie

Answered on 17 Jul 2020

Buying DBS shares for dividends may not be preferable, consider looking into REITS or so.

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Step 1: Open a CDP account

Step 2: Buy using DBS Vickers Cash Upfront Remember to use CASH UPFRONT, so that you only pay $10 for the broker's commission. Otherwise, it's a hefty $25.

Do note that there are also other charges e.g. SGX fee, GST.

Like many have suggested, buy when DBS share price is <$20.

Dividend goes directly into your bank account.

If you want to go into RSP, it's better to do it with ETFs (a basket of stocks), rather than a single stock.

Diversification is key for wealth preservation.

Since you are young, I'd suggest you go for capital growth too, instead of just dividend strategy.

Because without building up much capital, I cannot see a substantial dividend.

After reading extensively for about 8 months, I realised global ETFs particular accummulating ones can be a good way, since

1) we can DCA in a basket of stocks,

2) they can grow capital,

3) they pay dividends which are reinvested

4) I pay lower withholding taxes, as compared if I were to buy individual US stock

Above something for your consideration and research.

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Kevin

Kevin

Level 4. Prodigy

Answered on 16 Jul 2020

Concentrating your funds into one company is disadvantages as you are now held mercy by the single industry and you are bound to have high volatility. Instead, have a diverse portfolio of various equities with varying liquidity that suits yourself.

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If you have no knowledge about investments at all, I suggest do not try your luck with individual stocks. You may make money, but it is akin to gambling.

People always focus on the reward first but it is only when the tide goes out we know who has been swimming naked.

Learning more about the basics first at least would be something I recommend.

Here is a blog article summary I wrote on the intelligent investor by benjamin graham.

In relation to DBS stocks, I would suggest you learn more about the dividend discount model valuation as banks like DBS tend to have a high dividend payout ratio.

If you need any further help, I am also glad to chat with you here.

Hope this helps.

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In my opinion most banks are hit pretty bad due to the covid situation and there are some loan defaults where companies are not able to pay back their loans as they go bankrupt.

This would then affect the financial statement of the banks and lower their profits as a whole.

Interest rates globally are generally at all time lows and that means the interest paid for loans are low which means , again , lower profits for the banks.

It is a good long term hold for 5 - 10 years definitely!

Anyways the above is just my opinion, I would go after faster growing companies than this.

Do consider watching my youtube channel and videos like how to read financial statement of a company or how to research a stock from scratch

https://youtu.be/8WwSpyDpioM

Thank you!​​​

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N

NaN

Level 2. Rookie

Answered on 13 Jul 2020

DBS is probably the safest bank bet. I will add on dip below $20. But it is different for everyone, risk tolerance and exposure to market (I already have position on DBS)

More importantly for investing. Do not buy/sell on emotion. That is a game losing strategy.

Brokage wise. The cheapest is this, up and coming new brokage firm backed by MAS.

I not sure what is the benefit for using the link below, but better than nothing I guess.

https://www.tigersecurities.com/accounts?invite=KQU032

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If you wish to buy into Individual stocks, you have to be ready for the shot term fluctuations. Also, you will also need to do fundamental analysis of DBS. Based on my own intrinsic valuation of DBS, the intrinsic value is around $20. When DBS hits $20 or lower, I will consider entering more of DBS. You are right to buy DBS shares and keep for dividends, but do note dividends may or may not be cut since interest rates are near-zero and its not a good outlook for banks globally. Regardless, I hope you did your own due diligience and remember not to put all your eggs in one basket. Cheers

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DBS has certainly become cheaper and is a good investment for stable dividend and potentially as a growth stock.

you can consider doing the "cash upfront" option with vickers to have 10 dollars trade commission fee.

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Jac

2w ago

Hi! With regard to the cash upfront $10 commisson, any idea if POEMs has something similar? Cos I am using POEMS and have been paying $25mim for the longest time 😨. Thank u.
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Go to libbyapp.com and login via your NLB account, and go borrow as many personal finance / value investing books. Borrow books that are written from a practictioner perspective. Can start with beginer friendly:

The Five Rules for Successful Stock Investing by Pat Dorsey

The Ultimate Dividend Playbook: Income, Insight, and Independence for Today's Investor, Josh Peters

If books are not your cup of tea, there are a couple good US financial youtubers to follow

Graham Stephan: https://www.youtube.com/channel/UCV6KDgJskWaEckne5aPA0aQ

PPCIAN: https://www.youtube.com/channel/UCXtrYuGksGkkyls50lPWvYQ

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The risks of buying DBS are the lower net interest margin which will impact about 60% of their revenue, allowances on bad debts and the likelihood that dividend will be reduced.

As for buying DBS shares, you need a brokerage such as DBS Vickers or FSMOne. For DBS Vickers, you will need a CDP account where dividends will be credited to your bank account if u apply for their direct crediting services. For custodian like FSMOne, dividends will be credited into the cash account.

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