I received a summary report from sgx on my dividends received for 2018.
Total received is 6,750.
This is on a sum of 146,600 that I have invested in stocks, considering the entry prices of the stocks. Works out to be a yield of 4.6%
My goal is to earn a passive income of 36,000. I am still short of approximately 30k.
Assuming that I can save 40k a year and gets a dividend of 1600 a year. in ten years time, I would have an additional 16000. I would reach my goal in 19 years.
Alamak was writing my post halfway, and didn't save a draft. Now had to restart again.
Oh well...
Recently Hyflux made the headline as they found a Savior who could inject funds to save the ailing company.
I thought to myself, as I read the news. What could have caused a once starling blue chip company with a enviable business, to fall from grace to it's current state.
how could we learnt something from this and Noble group? Although I did not buy either Hyflux nor Noble group, I thought how could I prevent myself from buying such companies.
I went through my checklist to see if my checklist would be able to help me.
The fall that caused hylfux to be in this mess, was the fact that the company had took on too much debt. Whereas Noble overstated it's assets.
One common signal is that both companies did not generate positive cash flow consistently. And even though there were profits, the profits did not translate into positive operating cash flow over the years.
I went to relook at keppel and sembcorp industries that I bought. Although both companies are not in great shape, it's operating cash flow is still positive. And it had enough cash on hand to handle loans that are due in one year.
I realised investing fresh 10k a year is not enough.
Will aim for 30k a year. Wish me luck!
The year 2018 is drawing near to a close.
This year I sold off Hong Leong Finance, and Capital and, bought 10 lots of Singtel. All using CPF.
I bought 9k shares of sembcorp industries using cash.
Am scouring to look for a new stock to buy in 2019.
Aimed SIA and ST engineering. Both had consistent dividends. SIA eng had very little debt.
Initially I had wanted to compulsively conclude SIA eng is a better buy but when I dug further. Its core business is dwindling....that is a red flag.
As Warren Buffet had said, no matter how good the management is, a company with bad economics will outlive the management.
So SIA eng is out for me. Will study St eng in details.
With the China US trade war raging, stocks are jittery.
Keppel corp has dropped to 6.36, sembcorp 2.83, singtel 3.1, still waiting for them to drop further. Meanwhile am trying to save money so that can be prepared to go into market.
Keppel corp - waiting for it to drop to $5plus.
Sembcorp - $2
Singtel - $2
Most of the stocks that I currently am holding had made some regains after the world cup ended.
Stocks that I currently holds
Singtel
Keppelcorp
Sembcorp
Boustead
Though they had made some regains in the prices, the prices had not gone back to their prices before the world cup.
Last week, I decided to sell my capitaland (CL) and Hong Leong Finance (HLF)stocks holdings.
Both stocks were bought using my cpf monies.
Sold CL at 3.55 and HLF at 2.7
Made a total profit of approx 6k.
One reason for selling them now was because I decided to buy Singtel.
As shared in my earlier post, one yardstick which I used, is that the dividends from stocks bought using cpf should be >2.5% (interest rate in OA) as these monies came from my CPF OA. If the monies we're to come from SA, the dividend should exceed 4%.
Why singtel. Based on current price of 3.27, the dividend yield is >5%, doubled of OA interest. Although dividend is not a guarantee, i thought it is a decent return. With the 4th telco coming in soon, Singtel share might take another beating which would make it even attractive.
I came up with an investment checklist that I thought will be helpful to myself to use when evalating which stock to buy
Recently we were almost going to switch our 7 year Toyota altis to another second hand car.
We went to chat with my hubby's friend who works as a car salesman. Actually we had no thoughts of changing car as there is still 3 years to go for our altis car.
He asked us to try out the cars he had in his shop. Well there were a few cars that were not too bad, e.g nissan teanna. Actually he did not recommend us to change our car since we bought it when coe was high.
In the end, we got sold on the idea that maybe we should change our car.
But reality is even if we sold our car, we still needed to fork out 10 over thousands.
Our bank account balances was over 14k. So it was not wise to empty our pockets just to switch car for no apparent reasons.
I told my hubby this. But he wasn't listening to me. Instead he felt it was OK to switch.
The point is this was not a need. It was obviously a want. We may have to fork out monies for his medical expenses in the later part of the year and he thought that it is going to be all right.
I am not a reckless person, nor am I going to spend monies recklessly. Monies will not drop from the skies and if we do not practise prudence, we may have to end up borrowing monies from family which is a big taboo.
I refused to budge and told him flatly that I did not agree to switch car.
A few days ago, my sister approached me asking if I coukd help her invest 50k in stocks.
The few questions I asked is what is your expected returns per year and how long can you hold the investment.
Initially she told me 20k a year. Immediately I rejected her telling her that her returns are not possible. I am no magician to be able to generate such returns year in year out.
Then she relented and said decent returns a year. I pondered over the weekend what kind of stocks would fit her as her holding period is only a few years.
Her expectations are different from mine. Oil and gas companies are out of the questions. Reits might require injection of funds which she wouldnt have. In the end i zoomed in on the telco.
Telco are stable companies. I checked the 3 telcos M1, Starhub and Singtel.
Of the 3, I could say confidently that Singtel is the biggest player and if i were to buy this stock myself, and if the stock market prices somehow were not available for the next 10 years, I would not be so worried. It also has stable dividend payouts.
I informed my sister whom in the end, did not want to invest in Singtel because she felt the dividends based on current prices, at 5% is too low.
I told her honestly this is the best I could find. If she wants an alternative, she could ask my elder sister for advice because my elder sis is an active investor. The discussion ended on this note.
I was re-reading some of my earlier post. Forgot to mention other stocks that made me some profits in my early days of investing
Super group and raffles medical.
I bought them when they were dirt cheap in 2007. But unfortunately as I was too green then, I sold off the shares when the prices double. If i were to hold on to them, their value wouod have increased 10 times more. What a bummer...
I had some monies to invest after saving up abit. Had been looking for cheap bargains stocks to buy.
Some of the stocks that i considered buying were:
Boustead
Raffle medical
Starhub
And even comtemplating to buy index funds.
Those were the stocks that i was looking at before i chanced upon sembcorp industries.
This stock has main businesses dealing in utilities and oil and gas. While the O&G segment is still in the doldrums, I was more interested in the utilities business.
First, it is recession proof. 2nd, sembcrop industries had been moving into india (2nd most populus country after china). Earnings are stable. Dividend payout is low around 2.45% assuming it paya out 8cents and based on my entry price of 3.26.
In the end i decided to buy SI on 19/2. The recent feb market price drop caused it to dropped from 3.57ish to 3.22ish. A drop of 10% which make this quite irresistable.
Similar to Keppel corp which relies on it property business arm to prop up the share price, I believe the utilities arm of SI could similarly do so for SI.
The lowest price that SI had gone was 1.83 in 2008. The highest it went was close to 5.75ish. The potential downside is 1.43 and potential upside is 3.50. Although it is not possible to know the direction that stock prices are heading in the future, I could still tolerate such downside risks.
Stock bourses all over the world tanked on 5 feb. SG stocks are no exception.
Although stock price of some of my stockholding has dropped, their prices have not gone down too much for me to consider adding more.
I was not worried about my stock investment because I am confident that these stocks can ride out any storm.
Now is the time to be greedy and start shopping for cheap stocks when others are fearful.
