The bloodshed in the market for the last few days would have frightened any faint-heart investors away. Even seasoned investors like me was also appalled by the speed and magnitude of the fall, especially today – 28 Feb. The selling was simply ferocious and relentless … Many of the stocks had reached levels that I would not have even imagined just 3 months ago – Yes, situation today is different from 3 months ago but have the fundamentals of those companies changed???
Well, I hope you didn’t panic and sell. That’s probably the worst thing to do in a free-fall market like today.
Crisis is also an Opportunity. If you have a comfortable warchest, it may be the time to open it slightly and do some bargain hunting.
“Too early, it may fall further”, you may say … but we never know the bottom.
Experience tells me that timing the bottom is very difficult. I tried but was never successful. I missed out on the GFC opportunity to accumulate good companies as I was afraid of what I saw then …
But with that experience in the bag, my belief now is that as long as you feel the share price is not a fair representation of the value of the company, and it undervalues the company … you can already consider buying their shares as you have already “gotten value for yourself”.
Do you believe that the situation will be resolved eventually? Yes, it may take months and maybe one-two years but it will be not be permanent.
The best thing I think we can do now is to find a strong dividend paying company. There are many companies on our local Singapore stock exchange that will fit this bill. Even if the rebound really takes a while, you can still collect dividends in the interim.
Despite all these dark clouds around, there was still a silver lining for me … I have collected the most dividends in Jan and Feb ever since I started tracking my stock transactions and dividends.
Yes, my portfolio is down almost 6% since the start of this year. The “real drop” is however 4.5% as I got 1.5% back with my dividend income.
If I can continue to get 1.5% every quarter, then my 5% yield per year is within reach.
Q2 is looking very good too. If i don’t sell any of my shares now, I would get 1.2% already from what had been announced so far … and if I add those companies (particularly Reits) who will announce their dividends in April/May, then Q2 yield should be reach 1.5% and maybe even a bit more 🙂
In such times, dividends is my only consolation … and also it is the value that we get by picking dividend paying stocks.
Hope the situation would improve next week – health wise and money wise for everyone … take care and stay safe folks.