When we buy a stock, we are investing in part of a business. The business must make good money and grow. We will be rewarded with dividends which increase year after year and capital appreciation over the long term, better than other alternative investments.
I started dabbling in the stock market a long time ago soon after I started work in 1980. The above mindset had not evolved until much later. My earlier years dabbling in the stock market were speculating and gambling activities. Been there, done that. Anyway, it is better late than never to do investing in a proper and a correct way.
Most individual stock market participants lost money. We used to hear this 7:2:1 formula which states that out of 10 stock market participants, 7 have lost money, 2 broke even and only one made money. Recently I was surprised to read an article on research by a Nobel Prize winner in economics, Robert Shiller which mentioned that 93% of individuals who dabbled in the stock market lost money. Think about it, it may not be a surprise as most are speculators in the stock market. In my circle of friends and classmates in high school and university, golf mates, many of them are highly intelligent and smart people and had dabbled in the stock market. I have hardly heard of anyone who had made money, except for very few of them.
Speculation is a zero-sum game, how can an individual beats the institutional investors, the syndicates, and the big-time market manipulators with huge financial and computing power? It is a no-brainer.
However, it has been shown that the stock markets around the world, with dividends reinvested, returned a compounded annual rate of about 10% over the long term. That has been much better than putting money in banks. Any investor would be able to earn satisfactory return over the long term if he invests wisely.
How could you be one of them? That is the motivation of this book. It provides comprehensive guidance on how to search for good dividend stocks to invest in.
This book introduces the dividend investing strategy. This is suitable for investors who require regular income and those hoping to obtain a higher return than the broad market in the long-term. It is a safe investing strategy with less risk which gives investors a peace of mind.
There is substantial empirical evidence to show that high dividend yield stocks provided attractive total return in the US and around the world, and with lower risks. More importantly, if the dividends were reinvested, over a period of 100 years, it had produced nearly 85 times the wealth generated by the same portfolio relying solely on capital gains. Several research has also shown that if the high dividend yield is combined with low pay-out ratio, or with a low price to earnings ratio, or low price to book value, it produced much better return than just based on high dividend yield alone. Research also shows that the high dividend yield investing strategy outperform other value investing strategies.
The strategy is not only simply investing in the highest dividend yield stocks. The high dividend must be sustainable. High dividend is only sustainable if it meets various criteria such as continued growth in revenue and income, low pay-out ratio, high return on equity, healthy balance sheet, and the business must produce free cash flows. More importantly, stocks must be purchased with reasonable or better still, low price. With all these criteria, the strategy would produce the highest total expected return. My personal experience has shown that.
Readers will be guided step-by-step with plenty of examples of stocks listed in Bursa on how to compute those important performance and valuation metrics and use them to evaluate if a high dividend yield stock is worth investing, or if it is a value trap. This will assist investors in maximizing returns from this dividend investing strategy.
The effective use of stock screener is introduced to scout for a wide range of high dividend stocks meeting various criteria to invest in, not only in Bursa, but other regional markets with better opportunities such as Singapore, Hong Kong, the US, and other parts of the world.
A list of stocks using this dividend investing strategy was obtained from Bursa and Singapore Stock Exchange from screening and shared in this book. Each stock was discussed at length on the reasons why it represents good investment candidate, and why it was omitted. Investors would find some good dividend stock ideas with potential good return in the long-term and avoid investing in dividend traps.
If you are interested to have passive regular and higher income and building your long-term wealth in a safe manner with peace of mind, be the first to get hold of an autographed copy of the book shipped to your house or office in the link below.
Please remember to claim the free shop vouchers as shown in the link above when order.
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This book may worth hundreds of times for the small price you pay for it.
For those who have placed the orders, I am pleased to inform that they will be couriered to your address in about a week’s time free of postage charge for all Malaysian addresses. For overseas purchasers, the appropriate postage cost is applied.
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