Noob Dividend Question

[coutuser]

What puzzles me is why people cant just buy dividend stocks from blue chip companies like the telco and govt agency like pub, singapore power, LTA, etc?

These companies wont collapse.

If it is so easy to get rich, why isnt it happening?

After I open an account with scb, what should be my next step? thx.

 

[Dividends Warrior]

The government agencies are not listed.

You can buy telco shares though.

 

[lasnoblur]

What puzzles me is why people cant just buy dividend stocks from blue chip companies like the telco and govt agency like pub, singapore power, LTA, etc?

These companies wont collapse.

If it is so easy to get rich, why isnt it happening? Because stocks rise and fall everyday. Dividends are no guarantee too, meaning they can be cut anytime.

After I open an account with scb, what should be my next step? thx.Please read up more before asking.

See replies in blue.

 

[lzydata]

SingTel Share History - SingTel | SingTel

When Singtel was denationalised in 1993, and several times afterwards, all citizens did have a chance to buy shares at discounted prices. I have not done the sums, but I reckon those who bought, held on to their shares and reinvested the dividends over the years would have quite done well, throughout all the ups and downs of the market and Singtel's fortunes. But then, many people just sold off the shares to make a quick profit, and then got on with their lives like nothing happened. That was their idea of "getting rich." So much for the shareholder society.

Don't get me wrong, dividend investing can be a worthy strategy to achieve financial freedom. If your expenses are $24,000 a year, you just need to accumulate a $600,000 portfolio that throws off 4% dividends a year.

First you work to earn money, for many years, until you have enough money, then your money works for you. The stock market is one of the places your money can work the hardest for you, provided you are able to handle Mr Market's tantrums. Even if it is easy to just sit back and get dividends, for people who don't save much and have no idea how to invest, getting to that stage is nearly impossible.

 

[reksgwee]

also a noobie question, let's say you bought a certain stock at XX dollars, then when its time for them to hand out the dividend and the stock price is lower then when you bought it, will you still get the dividend?

 

[wizzyslurpee]

also a noobie question, let's say you bought a certain stock at XX dollars, then when its time for them to hand out the dividend and the stock price is lower then when you bought it, will you still get the dividend?

If you own the shares, you get the dividends based on the number of shares you own. The share price does not matter at all - it only matters to you when you want to sell. If the price is lower than the price you bought your original shares at, then you make a loss. If the price is higher now and you sell, you make a profit (minus any fees/currency conversion loss).

Meanwhile, as long as you have not sold yet, you get all the dividends declared.

 

[iCuteCube]

The ultimate aim is to collect as many shares as possible to get the more dividends.

Out of topic abit: Amazon practice variable pricing strategy. I was shopping for SSD and i noticed the price of the item actually fluctuate depends on demand and supply i assume.

Similar to stocks, do your own homework and buy at the "correct time" you deemed fit, and collect the units.

Maybe I have the mentality of keep looking forward, some of my friends spend time calculating their past purchases, like want to compare "wu-hua or not" , but my pov, just look at what you is your (current) portfolio, and what is your next step.

I don't really regret buying "heavy blue chips" stocks. Even though i know my age (25) can definitely tank the stock market cycle, but i felt safer to build my portfolio with "heavy" duty stocks.

First stock purchase - SPH @ $3.98 3 lots, few years ago, and there goes my capital that time.

By using this strategy, i confirm + chop won't get rich, but at least i can expect some steady dividends.

For more risker investment, i went in to physical precious metals (Which i am on a paper lost about 30%?). Another is FX which still have some steady small profits, but really slow, couldn't cover the precious metal loss.

But the overall portfolio is definitely in green with about 2.3% growth P.A from last calculation (June 2013). Some sort of Dividend Strategy kind would definitely be something comfortable for personality like mine.

My pov on your next step:

1) If you are looking at dividend you can do your homework to check the pricing of the various dividend stocks. Straits Times Index highest dividend yielding stocks

2) Hoot ah! (If you think the price is correct) <== Everyone have their own measurement on this, so it is really subjective.

3) Monitor your portfolio and if your portfolio is getting bigger, you might need to do re-balancing of your portfolio.

Copied from some thread, couldn't remember:
The general rule of stocks holding is 110 minus your age in your portfolio.

Added extra: PS, don't get blinded by the dividend yields.

 

[sAVaGEmP5]

Because the returns is not worth the risk.

 

[reksgwee]

wizzyslurpee & iCuteCube, thanks for the reply! It has been really helpful.