Saturday, July 14, 2012

July 2012 Singapore Dividend Portfolio Update

Average Price (S$)
% of Portfolio
Capitamall Trust
Suntec REIT
First REIT
Frasers Centrepoint Trust
CACHE Logistics Trust

Total dividends collected in 2012
Total Invested Capital
Projected Annual Yield (2012)
Average Monthly Dividends (2012)
Available funds for investment

Paper Gain / Loss (S$)

S$27, 300

I do not foresee myself changing anything for my Singapore Dividend Portfolio this month. Therefore, I decided to do an update earlier than usual. (My portfolio is stagnating T T *sob sob*)

For the month of July, I did not receive any dividends at all from my Singapore stocks. As a result, my average monthly dividends plunged to S$565.14. No worries. Another round of cash distributions and dividends are coming in August! Furthermore, my portfolio paper profit has crossed the S$27k mark for the first time as of Friday, 13 July 2012. ^^

Several readers have posted these 2 common questions to me in the past. 
- "I wonder what will you do/ how will you feel if the stock price drop is more than the dividends you received?"
- "What will you do if the price increase so much that you have no opportunity to buy?"

Let me address the questions here.

"What will you do/ How will you feel if the stock price drop is more than the dividends you received?"
Ans: Firstly, if the price drop is due to a global slowdown, it is not disastrous and there is no need to panic. As long as the fundamentals of the company is strong, it will survive the recession. In fact, a price dip could be a good buying opportunity. Example: 3 years ago, Starhub had to survive a triple whammy in 2009. There was the 1) financial meltdown, 2) the company lost the exclusive broadcast rights to the English Premier League matches and 3) H1N1 virus outbreak. Instead of going bankrupt, it increased its dividends and reached a new high of $3.60 recently. I know what some of you are thinking. "Alright! I shall follow DW's advise and average down whenever there is a price dip. Sure win!" Please do not do that. You must be selective. I am not telling you to average down blindly. Averaging down a troubled fundamentally weak company is just digging a deeper grave for yourself. Please do your own due diligence. 

Secondly (and this is the more important reason IMHO), I believe the dividends will be able to cover the price drop most of the time. Again, I know what you are thinking. "Is DW going crazy?!!" 
Allow me to illustrate a hypothetical scenario. Example: This quarter, Starhub is giving S$0.05 per share as usual. Oh no! Greece suddenly defaulted! Spain defaulted! The market is crashing! The price of Starhub plunged from S$3.60 to S$3! The latest dividend cannot cover the price drop! Sell! Sell! Sell!
However, if an investor has stayed invested for the past 3 years, he would have received $200 x 3 = $600 worth of dividends. Therefore, the $0.60 price drop is fully covered by the dividends. My point is, stay invested for the long-term. The longer you are invested, the greater the amount of dividends you will have to weather the storms. Another famous example will be Warren Buffett. Do you think he would be worried if the price of Coca Cola drops during a recession? He will not bat an eyelid simply because the amount of dividends he received over the past 30 odd years are more than enough to cover a fall in price.

"What will you do if the price increase so much that you have no opportunity to buy?"
Ans: Simple. Sit tight. Relax, Shake leg. Collect dividends as you wait for an opportunity. I am doing that now. ^_^
Remember, More Wealth with Less Work!

Peace Out,
Dividend Warrior


Musicwhiz said...

Your returns from equity investing are directly correlated to the valuation in which you purchased a company. Even if it was a well-run company like SPH or Starhub, buying expensively could mean either sub-par returns over an extended period, or even negative returns should the business suffer.

Bottom-line - watch the business, and keep an eye on valuations when you make your purchase.

Dividend Tech Warrior said...

Hi MW,

Long time no see. I hope you are doing fine. Thanks for dropping by. :)

I agree. We should buy stocks at reasonable prices, no matter how well-run the companies are.

SI@SG said...

Kudos to your portfolio, DW!

Your call on buying the telcos have paid off magnificently too. The rise of Starhub was spectacular.

I strongly believe in building a strong cashflow-yielding portfolio like you too. Agree with your post on NOT TO PANIC during downturn if you are holding on to a great company giving good dividends.

All the best! :-)

B said...

August would be a good time to enter for more dividend stocks as many are going another ex-dividend by then :D

Anonymous said...

Hi! Any stock would you recommend to buy in now? Or what's your latest target? I know now is not the time to buy stocks as it rose a lot... I am so regret that didn't buy in during June when there's a drop...

Anonymous said...

Is your Paper Gain/Loss for this year? Or how long have you invested?

Anonymous said...

hey DW wats your contact details

SY said...

Hi DW,

What are your thoughts on the Ascendas Hospitality Thrust IPO ?

Anonymous said...

It's all about having a margin of safety and being comfortable with the level of risk undertaken

Anonymous said...

Thanks for sharing.
May i know why didn't you have CCT ?
Capitalcommercial trust.Was told it is good for Div pay out. Is it too high to buy now ?

FoodieFC said...

very nice post! I like!

Anonymous said...

If you have a paper gain of 20k. Why not just sell it and take this 20k as a dividend over a certain number of year. You can buy it again once it drop (which is alway the case) and start it ^_^[DunBugMe]

Anonymous said...

Why do you say that your portfolio is stagnating?

"My portfolio is stagnating T T *sob sob*"

Dividend Tech Warrior said...

Thanks for all the replies guys!

I shall answer all the questions at one go.

Right now, my target will be Singtel once it goes XD.

My paper gains are over 3 years. Pure capital gains.

Sorry, I am not interested in Ascendas Hospitality REIT bcos I am not comfortable with the cyclical nature of the hotel business.

I dun have CCT bcos I dun want too much exposure to office REITs. Besides, I oredi have Suntec REIT.

My portfolio is stagnating bcos I have not added any stocks for awhile now.

Dividend Tech Warrior said...

Yo Foodie!

Thanks for the compliment! ^^