AMA Christopher Tan
Asked on 23 Jan 2019
With 10k in seed money I would like to start a portfolio of dividend yielding stocks such as Singtel, REITs etc
May I have advice on recommendations and allocations ?
And which platform to use? Any advice is kindly looked forward to
One of the thing u may want to consider is cost when building your portfolio. The cheapest transaction (enter and exit) fee is $10. If u want to diversified, 10 stocks of $1000 will cost u $200. 5 stocks of $2000 each cost u $100. The former eats up 2% while the late eats up 1%
U would want to get your portfolio diversified. So pick 2 - 3 stocks and put the rest into robo advisors.
And do your research. Why singtel? Is it really a dividend play?
This is a good strategy. Although you might start slow, but slowly the dividends will compound to give you more and more, eventually allowing you to sustain your lifestyle.
I am not expert on the Singapore market, however the singapore S-REIT's dividends seem very attractive on global comparison, however inflation should also be acknowledged.
Anyway I would not recommend single equity investing but rather ETFs,
like the (mostly Singapore focused) Lion-Phillip S-REIT.
When thinking of dividend yielding stocks you should consider that dividends are only one part of stock investing, also the rise/fall of the stock price (= capital appreciation) must be considered. The following chart compares the 10 year price performance of the U.S. SP500 to one Singapore stock index ETF: Nikko AM Singapore STI ETF
The latter is almost a flat-liner compared to SP500, so maybe with Singapore stocks You have nice dividends but almost no capital appreciation or even losses.
The SP500 as an ETF (f.ex. VOO or IVV) currently has also nice dividend distribution (up to 2.0%).
High dividends stock investing in SIngapore is really a very good idea. Dividend investing will be essential when living in Singapore becomes expensive. Inflation will always be in the economy and living standard is bound to increase eventually.
Some tips to make the most of dividend investing:
Select the companies that have been increasing the dividend over the years
Invest in the companies with long dividend payments record
Never forget to diversify your portfolio
Grab the knowledge of financial ratio
Hi anonymous, thank you for your question and sorry for the late reply. I have to say that I am not an expert in stocks so I might not be of any help here. Personally, I prefer to invest in a portfolio of low cost ETFs or Dimensional funds. It allows me to diversify my investments over thousands of stocks at a low cost.
All the best.
Why specifically SingTel? I suggest you to read up on the various types of investments and tips offered by various articles/blogs/books/gurus. Afterwards, triangulate and corrobate a few methods and start working on those. Each of us have different risk threshold, different yield appetite (though no one would dimiss 200% returns) and it is not possible to specifically recommend you a stock portfolio without full knowing of your demographic. Also, it is better to take charge of your own money since who fears losing your money more than yourself? Although the process is time consuming, I believe this method is much more effective. All the best!