If Warrior can do it, so can you!
Regular readers of my blog will know that one of my key investment objectives is to build a portfolio that can provide 5% dividend yield annually. I try to be a bit more kia-su (i.e. afraid to lose) by adding 1% to the more convention 4% Rule. If you have not heard of the 4% Rule (a concept for retirement planning), you can find some references at the end of this post.
Yes, I just did it – with the dividends declared by Ireit today, the total dividends that I have and will definitely receive this year has breached the 5% mark!
It is one full Quarter ahead of my target plan, with a little bit of additional help by deploying leverage as a tactic, i.e. using margin account (which I had blogged earlier) to purchase some stocks that are seemingly undervalued and have decent dividend yields. But like I warned everyone earlier, it’s a risky approach and needs to execute with care and prudence, don’t be too greedy and over-leverage. Mr Market is well-known to be very ruthless from time to time ….
The chart below shows the dividend yield received by quarters. If everything goes smoothly, I may be able to get 6-6.5% dividend yield by end of this year.
The Honour Roll
My Top 10 dividend contributors are:
As you can see, they are mainly Telecoms, Reits and BizTrusts => probably the companies that are offering the highest dividends yield on the Singapore Stock Exchange now.
Their total dividends amount to 55% of the total dividends that I have received or expected to receive soon.
In case you are interested, the top 10 holdings in my portfolio currently are in the table below. No one should be surprised to see many of the same companies here …. thought there are exceptions too.
To put things into perspective, not everything is as rosy as it may appear. While the dividend yield has reached the 5% target, the value of my portfolio is currently running at a paper loss of 6% compared to my purchase price.
I don’t really like it … I guess no one like losing money anyway … But I think we have to put into context our investment objectives when we view this.
I go for dividend first and capital gain second. Hence, as long as I can keep myself “whole”, i.e. not losing capital, I should be happy already.
With so many uncertainties around us – rising interest rate, mounting trade war, heightened geopolitical tensions in the middle east etc …, we will have to stomach the higher market volatility for a while longer.
Meanwhile, 9 Aug = Happy National Day to my fellow Singaporeans.
It is a day to remember all the hard work that our parents and grandparents have put in to make our beautiful country what it is today and to reflect how we can continue to build on this foundation to make it even better.
Let’s feel proud of the our country’s achievements but continue to be humbled and remain resilient and preserve with determination, especially given the specific challenges/limitations of our country and the global/regional/market uncertainties that hold for us and our children.
Enjoy the holiday everyone (and the long weekend for some)!
Talk again soon,
- Four Percent Rule by Investopedia
- Learn About the 4 Percent Rule in Retirement and How It Works by “the balance”
- Three things you need to know about the 4% rule by CNN Money