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Dear gurus,

Seeking your advice.

I have been buying American equities.  They have been paying dividends of about 6% yearly.  I have a question.

Let's say each investment unit costs $1.  I invest $10000. Total 10000 units.  I get 6% per unit annually.  So I get $600.

But the price of equity has gone down to $0.50.  So I invest $10000. I get 20000 units.  I get 6% per unit annually.  So I get $1200.

Assume dividend doesnt change.  Am I correct or did I miss something?

Then isnt this a good time to load up on dividend stocks? 

Please note i dont intend to ever off load the stocks or even re invest but just take dividends.  I do top ups when I feel like it but I dont reinvest (compound interest).

TIA.

Edited by Philipkee
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30% withholding tax on US equities dividends for Singaporeans. So 6 cents = 4.2 cents received (have to see if have dividend handling fee by your broker)

Dividends maybe reduced or even canceled depending on the Earnings. Dividends are simply spare cash not required for cashflow or expansion or day to day operations. 

It can be cut anytime. For example, obviously no airline is going to announce dividends for the forseeable future.

No free lunch in this world!

Edited by Lala81
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1 hour ago, Philipkee said:

Dear gurus,

Seeking your advice.

I have been buying American equities.  They have been paying dividends of about 6% yearly.  I have a question.

Let's say each investment unit costs $1.  I invest $10000. Total 10000 units.  I get 6% per unit annually.  So I get $600.

But the price of equity has gone down to $0.50.  So I invest $10000. I get 20000 units.  I get 6% per unit annually.  So I get $1200.

Assume dividend doesnt change.  Am I correct or did I miss something?

Then isnt this a good time to load up on dividend stocks? 

Please note i dont intend to ever off load the stocks or even re invest but just take dividends.  I do top ups when I feel like it but I dont reinvest (compound interest).

TIA.

You'll be mad to assume dividends dont change

However if it is shortlived non fundamental drop then you huat if you got in at 50% discount from normal

so yes it is a good time to get in if your view is that the downturn os shortlived and non fundamental 

while i replied you, it doesnt mean i am a guru.  Just means i have skin in the game and for a long long time already

Edited by Throttle2
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1 hour ago, Philipkee said:

Dear gurus,

Seeking your advice.

I have been buying American equities.  They have been paying dividends of about 6% yearly.  I have a question.

Let's say each investment unit costs $1.  I invest $10000. Total 10000 units.  I get 6% per unit annually.  So I get $600.

But the price of equity has gone down to $0.50.  So I invest $10000. I get 20000 units.  I get 6% per unit annually.  So I get $1200.

Assume dividend doesnt change.  Am I correct or did I miss something?

Then isnt this a good time to load up on dividend stocks? 

Please note i dont intend to ever off load the stocks or even re invest but just take dividends.  I do top ups when I feel like it but I dont reinvest (compound interest).

TIA.

What is EPS of these shares?

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Turbocharged
18 minutes ago, Angcheek said:

I didnt know Equity so good one ...  price drop but they help you retain your capital . 

 

🤔

I reckon there are people who believe in very very long term investment.....

Macham buying freehold properties ie forever ever perpertual one lol

🤣

 

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2 minutes ago, cashcow said:

I reckon there are people who believe in very very long term investment.....

Macham buying freehold properties ie forever ever perpertual one lol

🤣

 

Because these ppl might not be looking at regular income stream.

 

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56 minutes ago, Throttle2 said:

You'll be mad to assume dividends dont change

However if it is shortlived non fundamental drop then you huat if you got in at 50% discount from normal

so yes it is a good time to get in if your view is that the downturn os shortlived and non fundamental 

while i replied you, it doesnt mean i am a guru.  Just means i have skin in the game and for a long long time already

Cos I intend to hold this long term.  So it's ok UNLESS its another Lehman Brothers 

53 minutes ago, inlinesix said:

What is EPS of these shares?

No idea.  The product brochure says 0.051 per unit monthly.

14 minutes ago, cashcow said:

I reckon there are people who believe in very very long term investment.....

Macham buying freehold properties ie forever ever perpertual one lol

🤣

 

I planning to live off my dividends when I retire in the village.  So I dont intend to sell off my investment (unless it shoots sky high where it might be worth it).

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2 minutes ago, Philipkee said:

Cos I intend to hold this long term.  So it's ok UNLESS its another Lehman Brothers 

No idea.  The product brochure says 0.051 per unit monthly.

I planning to live off my dividends when I retire in the village.  So I dont intend to sell off my investment (unless it shoots sky high where it might be worth it).

If its an equity, it may be unsustainable for the company to run a long term negative cashflow just to satisfy their marketing materials

Unlikely, the dividends are mandated by their exchange, so its fluid, according to their business needs.

Just be very aware of your investment's business model, and be ready to cash out if the situation requires.

Have not heard of any single stock that can fund retirement perpetually, else all the pension funds will just park there with zero management fees 

 

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9 minutes ago, Philipkee said:

Cos I intend to hold this long term.  So it's ok UNLESS its another Lehman Brothers 

No idea.  The product brochure says 0.051 per unit monthly.

I planning to live off my dividends when I retire in the village.  So I dont intend to sell off my investment (unless it shoots sky high where it might be worth it).

? This is a fund right. Not equities.

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8 minutes ago, Sturtles said:

 

Have not heard of any single stock that can fund retirement perpetually, else all the pension funds will just park there with zero management fees 

 

I plan to retire in a village so no need much money.....

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1 minute ago, Philipkee said:

 

I plan to retire in a village so no need much money.....

Bro, the idea is, money is yours, and you put them with the listed entity for them to invest and grow your money.

At 6% pa, but it dropped 50%, would you be better off keeping the money in your pocket in the first place, and also if it will continue to give 12% dividends at the current valuation.

We are too focused on yields because its easy to understand, but the underlying risks are higher, especially when one does not know the market well.

My own takeaway is to understand what you are buying, and how their business works,  if its sustainable, and when to exit or you are just using up limited investment time and paying fees for lessons our education system cannot teach

 

 

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6 minutes ago, Philipkee said:

 

I plan to retire in a village so no need much money.....

EH... the link u showed me. The fund holds 65% high yield (ie less than investment grade) bonds. That's going to be a real big bomb...

I would halt all purchases immediately And maybe even cut losses and redeem.

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1 minute ago, Sturtles said:

Bro, the idea is, money is yours, and you put them with the listed entity for them to invest and grow your money.

At 6% pa, but it dropped 50%, would you be better off keeping the money in your pocket in the first place, and also if it will continue to give 12% dividends at the current valuation.

We are too focused on yields because its easy to understand, but the underlying risks are higher, especially when one does not know the market well.

My own takeaway is to understand what you are buying, and how their business works,  if its sustainable, and when to exit or you are just using up limited investment time and paying fees for lessons our education system cannot teach

 

 

It's very risky IMO currently ...

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29 minutes ago, Philipkee said:

 

No idea.  The product brochure says 0.051 per unit monthly.

It's some sort of product/fund? 

Do read and assess carefully. You know the baseline any alternative investment needs to beat is CPF 2.5% minimum . (assuming the CPF law is not changed, SGD does not depreciate... Etc). 

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17 minutes ago, Philipkee said:

 

I plan to retire in a village so no need much money.....

 

35 minutes ago, Philipkee said:

Cos I intend to hold this long term.  So it's ok UNLESS its another Lehman Brothers 

No idea.  The product brochure says 0.051 per unit monthly.

I planning to live off my dividends when I retire in the village.  So I dont intend to sell off my investment (unless it shoots sky high where it might be worth it).

Well common sense tells you that you cant have the cake and eat it.

to sustain a fixed payout, the fund may have to take from its NAV everynow and then. So you may end up just taking from what you are putting in and at the same time feeding the sales person, the fund manager, the ops guy, the admin guy, the CEO etc etc....

But as you said, you dont need much.  Just do it bro. 

You have done it in your head and heart already, anyway, right?

and who is to say its right or wrong.  Your money

😀

 

Edited by Throttle2
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On 3/21/2020 at 11:00 AM, Philipkee said:

Dear gurus,

Seeking your advice.

I have been buying American equities.  They have been paying dividends of about 6% yearly.  I have a question.

Let's say each investment unit costs $1.  I invest $10000. Total 10000 units.  I get 6% per unit annually.  So I get $600.

But the price of equity has gone down to $0.50.  So I invest $10000. I get 20000 units.  I get 6% per unit annually.  So I get $1200.

Assume dividend doesnt change.  Am I correct or did I miss something?

Then isnt this a good time to load up on dividend stocks? 

Please note i dont intend to ever off load the stocks or even re invest but just take dividends.  I do top ups when I feel like it but I dont reinvest (compound interest).

TIA.

Er ......... hardly heard pple doing a dividend play for US stock lor...

US stocks, generally are growth or visionary play lor.  You need to ownself find out what is a growth and visionary stock approach hor.

As a foreign alien, generally is looking to growth.

OK.  The 6% thing, are you talking about Forward Annual Dividend Yield ?

For US and many part of the world, the dividend yield is simply the dividend divide by current stock price lor.  If you stock price is halved, the yield should be 12%.

 

If you are into dividend play, SG best lor.  Also long as it pump 5%, everybody is happy.

 

I assume you understand what is a W-8BEN form ah ?

 

 

Edited by Apple-Tree
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On 3/21/2020 at 11:12 AM, Lala81 said:

30% withholding tax on US equities dividends for Singaporeans. So 6 cents = 4.2 cents received (have to see if have dividend handling fee by your broker)

Dividends maybe reduced or even canceled depending on the Earnings. Dividends are simply spare cash not required for cashflow or expansion or day to day operations. 

It can be cut anytime. For example, obviously no airline is going to announce dividends for the forseeable future.

No free lunch in this world!

Generally, if you are a foreign alien and have not been working more than 180 days in US. U qualify for waiver by submitting a W-8BEN form lor.

The form is valid for 3 years.

Whether you use SG stock platform or US local or foreign with US platform, still need to sign up W-8BEN wor.

Anyway, long time never play US, too volatile loh.  The heart poke poke ...... in the midnight of the night.

Then there are a lot of other sai fees, like local agent fee laaa .........

Edited by Apple-Tree
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