Changing strategy from dividend stocks in 2017

My portfolio of Singapore equity selection was mainly based on dividend stocks. If the dividend yield was above 3.0%, I would be happy to hold on to them. Dividend yield is based on the actual dividend received in the year against my actual cost of stocks purchased. This is my return on investment (ROI) on investing in stocks.

The following lists some dividend stocks I own.

Counter Actual Dividend Yield (%) in 2016
SPH Reit 5.81%
StarHub 4.70%
Keppel Reit 4.42%
SPH 4.37%
Singtel 4.33%
M1 4.15%
UOB 4.10%
OCBC 3.48%
DBS 3.32%
Keppel Corp 3.04%
STI ETF 2.86%

This is just half the picture. The other consideration is the price changes resulting from drop in stock prices.

The Price Decline is from cost of purchase against current stock price as at 23 December 2016. Top four Price Declines came from M1, Keppel Corp, StarHub and Keppel Reit. My price entry was high when I purchased them. M1 and StarHub were hit by new fourth Telco entering the market in Singapore. As for Keppel Corp, it was affected badly by collapsing oil prices.

Counter Price decline (%)
M1 -48.0
Keppel Corp -41.2
StarHub -35.0
Keppel Reit -32.9

Come 2017, my strategy will change. I have enough dividend stocks and won’t be adding more. If I look at SPDR STI ETF, my STI ETF only declined 9.2% from my cost of purchase. The dividend yield was 2.86% which is decent enough return. So instead of picking individual counter/stock, I would like to consider more of SPDR STI ETF. STI ETF matches the Straits Times Index (STI) and is a basket of 30 blue-chip stocks. By investing in STI ETF, I am spreading risks across a basket of stocks. Risk is lower than if one selects a few stocks.

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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