Dr Tee, Ein55 Mentors & Graduates have together organised 9 charity investment courses (REITs in Nov 2015, May 2017 and May 2019, High Dividend Stocks in Mar 2016, Oct 2017 and Nov 2019, Capital Growth Stocks in Apr 2018 and Discounted NAV Stocks in Sep 2016 and Nov 2018) in the past 5 years, donating net income of around $176,000 to Tzu Chi 慈济 (Singapore).
We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need. More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future.
Here are key learning points from the recent Charity Course on High Dividend Stocks:
1) Invest for dividend income is one of the important criteria that stock investor must not ignore because historical data shown that
1.1) S&P 500 (1932 to 2014) – dividend contribute 45% of portfolio return
1.2) STI 30 (2003 to 2013) – dividend contribute 49% of portfolio return
2) Financial Analysts Journal indicates that a portfolio of 10 stocks will diversify >75% of total investment risk but out of it 19.2% is systematic risk which is un-diversifiable such as change in global economy situation, interest rate change, natural disaster etc, with 30 stocks will diversify >95% of unsystematic risk (operational related risks), further add on number of stocks would not reduce significant risk in the portfolio but increase difficulty to monitor. For individual investor, suggested number of stock in a portfolio is 10 to 30 stocks.
3) 3 main criteria for a High Dividend Yield (DY) Stock:
3.1) DY > 6% for Singapore stock or 7% for oversea stock base on entry price,
DY>/= Risk Free rate + LT inflation rate + local/oversea currency pair CAGR
SG : CPF SA 4% + 10yr inflation 2% = 6%
HK : 10yr TB 2.0% + 10yr inflation 3.0% + 10yr CAGR SGD/HKD 2% = 7%
US : 10yr TB 2.5% + 10yr inflation 2.5% + 10yr CAGR SGD/USD 2% = 7%
3.2) Continue 5-year non-stop payout dividend and no reduction in DPS (Dividend Per Share), best is growing year after year. For overseas stock, looking for dividend stocks with 10 years non-stop payout.
3.3) Strong fundamental stocks (eg. ROE > 5% and other criteria) to avoid value trap of high dividend yield with weaker fundamental or lower share price.
4) Telcos, Utilities, Banks, Consumer Staples and Consumer Monopoly are considered defensive sectors that can make money in any economic environment, therefore ideal for dividend stock investing. People usually will not shut off their power, close bank accounts, give up their mobile line or Internet, stop buying food & drink or stop buying toothpaste when times get tough. Furthermore, some of these companies have grown to big scale that dominate the market, they are either natural monopoly or near monopoly, duopolistic or oligopoly in the industry.
We should drive the money (helping others when you are successful), not driven by the money (making money only for own gain).
Investors should learn the unique LOFTP Strategies (Level 1-4, Optimism, Fundamental, Technical, Personal Analysis) developed by Dr Tee to choose strong global stocks, buying them at low price, then holding for consistent dividend payout or selling for high capital gains. High-quality free stock investment courses are provided by Dr Tee to the public.
Register Here to learn High Dividend Stocks & other 10 Strategies for Free: www.ein55.com
