Dividend Is King

  Banks make up a huge part of the Singapore investment scene and they are extremely popular among investors. They are attractive blue-chip stocks as they provide relatively high dividend yields and growth potential. Personally, I am looking to add some bank stocks to my dividend portfolio at the end of this year as I feel they are great long-term stocks for dividend investors. I will be analyzing the top 3 Singapore bank stocks using the following 5 financial terms: 1. Earnings Per Share (EPS): EPS shows how much a company makes for each share of its stock and is a good indicator of a company's profitability. You can read more about EPS here .    2. Returns On Equity (ROE): ROE measures how effectively a company is using its assets to generate profit and its a good indicator of the company's management proficiency. You can read more about ROE here .    3. Dividend Yield: Dividend yield shows much a company is paying out dividends to its shareholders. You can read more about di

I have asked one of my close friends, Desmond*, to give his perspective regarding the potential of healthcare stocks in the Singapore market in the current COVID-19 pandemic. His investing strategy is very much different from mine. I prefer dividend investing where I invest in proven and stable companies for the long term while he's a growth investor who invests in companies that have the potential for high growth (which are healthcare-related companies in the current pandemic). He started investing in healthcare stocks in the Singapore market in June and has made a profit of 20% on his portfolio within 2 months. The purpose of this post is to show a new perspective on a different investing strategy (growth investing) and how it can work for different investors. There are many different types of investors and it doesn't matter which type you are as long as you are able to profit consistently with your investment strategy. Desmond's Perspective The onset of the coronavirus 2

As a new investor, it is often good to take a look at successful investment portfolios that you can emulate and learn from. Furthermore, it provides inspiration for yourself and shows that it is actually possible to achieve your financial goals as long as you are disciplined and consistent. You can find out many more Singapore investment blogs here . Here are the top 3 passive income blogs to inspire you.   1. Lady, You Can Be Free Lady, you can be free is an extremely popular investment blogger in Singapore. Her investment portfolio consists of stocks in both the US and SG market. Her investing strategy consists of a mix of dividend stocks in SG and growth stocks in the US. She's a huge inspiration for beginner investors and shows that you can achieve financial freedom as long as you have a solid financial plan and stick to it. She has an impressive investment portfolio with more than $1 million exceeded in profits from her US portfolio and she received around $60k + in dividends

Recently, I added around $2,600 worth of CapitaLand (C31) shares at $2.90 to my investment portfolio. I feel it is currently very undervalued and it is a good combination of a dividend and value stock currently.  CapitaLand is Asia's largest diversified real estate group and it has a large portfolio of properties and various REITs valued at more than $100 billion. It has a market capitalisation of $15 billion and is considered a blue chip stock that is included in the Straits Times Index Exchange Traded Fund (STI ETF). In my opinion, I feel that it is currently trading at a massive discount below its fair value of around $3.90. You can check out the various banks' fair value estimate of CapitaLand (C31)  here . Here's my analysis of why I think CapitaLand (C31) is a good buy at its current price.    Low Price to Book (P/B) CapitaLand has an attractive P/B ratio of 0.62 at its current share price of $2.86. The P/B ratio is used to measure the company's market valuation t

Dividend investing is extremely popular and attractive in Singapore due to its relatively high returns compared to other countries in the SEA region. Singapore's stock market is famous for its niche of high-quality dividend stocks such as REITs and banks. Furthermore, dividends in Singapore are tax-free and are a good way to receive passive income. Who doesn't like seeing money enter their bank account regularly without working? It is one of many strategies to increase your income streams and helps you achieve your financial goals earlier. I would be explaining how you can create your own dividend portfolio as a beginner investor in Singapore.   1. Determine your investment goal The first step is to determine your financial goal such as how much you would want to receive from your dividend stocks monthly. For example, your goal could be to receive $1,000 monthly from your dividend stocks to supplement your income. That would add up to be $12,000 annually from your dividend port

Recently, some of my friends have asked me about what type of challenges they may expect with a dividend portfolio. A dividend portfolio in Singapore essentially consists of dividend-paying stocks such as banks (DBS, UOB) and REITs. It is a good and stable way to receive passive income and many people have already adopted this strategy. There are obviously pros and cons of every investing strategy and I would be discussing my top 3 challenges with dividend investing in Singapore.  1. Investment Capital The first challenge of dividend investing is you will need to have a substantial amount of starting capital to get significant returns. For example, if your goal is to achieve a passive income of $1000 per month at a 5% yield, you would require an investment portfolio valued at $240, 000. This can be a large amount of money for some people and look intimidating. Thankfully, this is easily manageable with the snowball effect due to the magical powers of compound interest. All you require

As a snowball rolls down a snow-covered hill, the ball will pick up more snow, increase in size, gaining more mass exponentially. It is a good analogy for the effects of compound interest. The earlier you start investing, the easier it is for your money to multiply and grow. Albert Einstein famously said that 'Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn't, pays it.' Just how powerful is compound interest? Assuming your goal is to reach a $1 million portfolio by the age of 55, the amount of money you will need to invest monthly varies by a huge difference depending on when you start.    If you start at... -Age 25: You will need to invest $835 monthly  -Age 30: You will need to invest $1233 monthly -Age 35: You will need to invest $1916 monthly  -Age 40: You will need to invest $3133 monthly    *Calculations are assuming a 7% yearly compound interest    The amount needed per month to achieve the goal changes drastically the

Stormy Weather Ahead  It's been a rough year for my portfolio due to the current coronavirus. The pandemic has adversely impacted stable dividend stocks such as REITs. The total returns I have generated from my portfolio from 2020 Q1 and Q2 is around $600 (1.5%). This was expected due to the circuit breaker measures in Singapore which caused most REITs to cut their dividends to maintain a healthy cash flow and to provide rent relief to tenants. I have faith that the REITs would increase their dividends in the long run when the coronavirus pandemic tides over and more places open up. There are 3 main takeaways for me in this period: 1. Winners and Losers  This current pandemic showed that hospitality and retail REITs are the most vulnerable to a downturn in the economy. The lockdown measures in various countries caused the revenue for hospitality and retail REITs to decrease sharply as more people stayed at home. As a result, their profits took a significant hit and they had no choi

Many of my friends have asked me about my thoughts on Straits Time Index (STI) exchange traded fund  (ETF) and why I do not invest in the STI ETF. The STI ETF is essentially a fund that comprises the top 30 companies in Singapore and it is thought of as being safe and stable due to its diversification. In my opinion, investing in STI is not an ideal passive income strategy and your money can be put to much better use. There are mainly 2 ways you can earn from a stock: share price appreciation and dividends. In this article, I would be elaborating on why I think investing in STI is not a good passive investment strategy. 1. Inferior Share Price Appreciation Investors who invest in Exchange Traded Funds (ETFs) such as the STI ETF usually adopt a buy and hold long term strategy. The idea is that the ETF will have an upward trend in the long run and they will profit from the appreciation of the ETF price. Is that the case with the STI ETF? If we look at a 15 year period from 2005-2019, the