Q&ACategory: Dividend Stockssimple question
Chai Liang Quek asked 5 months ago
Hi Coach,
can you help to answer my queries.
1.What are the risks if I apply your technique to invest ?
2.Given that i can save 2k per month to invest,what do you recommend if I would like to have average 6% income return per year ,assume I am moderate investor ?what strategic I can use to achieve this goal ?
3.based on goals stated in point (2).How do i select investment vehicles to invest ?
4.how can i minimum my risk while maintain my goal in point (2)?
1 Answers
Rusmin Ang Staff answered 5 months ago

Hi Chai Liang,

Sure! Let me answer ur questions below:

1. The technique we've developed here focus on the most important things when it comes to analysing company. Analysing company can be quite daunting so we try to simplify as much as we can here. So far the method has work well for us, including our students but there are various of risks for every businesses that we invested. So things can still go wrong and that's why it is important that we diversify across different businesses/stocks.

2. I think 6% is quite achievable at current climate. If you are investing in Singapore and HK, there are plenty of dividend stocks/REITs that offer 5% - 8% sustainable yield and on a diversified portfolio, you should be able to get 6% yield, excluding capital gain. Once you go through the training modules, you can start to apply what you've learned and you will realised there are a few of them. To save time, you can start off with the dividend list.

3. If the price is right, I personally like REITs, banks/insurance and dividend stocks if you prefer to get steady return and do not want to see too much volatility (i.e. growth stocks) in your portfolio. Bear in mind that REITs and banks are sensitive to interest rate but if you get exposure in these sectors, they should hedge against each other.

4. Stick to one strategy and I think dividend investing is probably the safest strategy since it can deliver consistent return, even when the market is having a bad day. Then you'd need to diversify your holdings: 10 - 30 stocks across different industries, depending on the size of your portfolio. Once you've done these two steps, the next challenge you'd need to overcome is yourself. Investing with real money can be very different Even though I mentioned that dividend strategy is the safest strategy, you might still see some volatility in some of your holdings, especially when we are going through a big crash (no one knows when that's going to happen). If you're not mentally trained, you might panic and sell out at the wrong time. So it is not just about the strategy itself but we need to have the long-term mindset when it comes to dividend investing.