Saturday, January 17, 2015

Top 5 Stock I will be Investing (Final)

Hi Everyone,

Tomorrow will be the very first day that I will be stepping into the world of investment and the path towards making my money work.Certainly I am truly excited and ready (I have been preparing for two months in understanding how stock market works, what are the things to look out for and also what is my objectives are for both short term and long term).

Certainly, my only objectives is long term investment which is why I am looking at only the blue chips. Of course, not every blue chips have spur my interest because there are still uncertainty about some blue chips in terms of stability. 

I have made some rational decision and some general background understanding on which blue chips are the best to invest (especially for a newbie like me). Understanding the background of the company isn't easy, thus, I am using my own understanding with the help of the people on the internet especially on the forum in Hardware Zone - Stock and Indices Section. They are really a helpful bunch of people who constantly answer my doubts and question that I have raise upon in the forum.

Back to the main topic, as I have mention about the few blue chips that I am focusing on is based on my own judgement, their nature of business (that plays a part in Singapore) and also the most important thing is the growth and dividends!! (that's where all the money comes in). Certainly, I am not so concern about the capital loss or growth in the company that I have invested because I am a long term investor, I will mainly focus on the possible growth and the stability of the company itself. Which is important to me to understand the dividends instead. I understand that many experience investors might not agree with my thinking because capital growth is also an essential part in getting returns/yields. 

For me, since I am just starting, it is important for me to grow my capital trough dividends which don't really require me to constantly read up on articles as I have my full time job to handle as well.

Okay, with my long winded post, so I shall reveal my top 5 where my first 6.5k investment will go into.
Here we go!
  1. Singtel - 4.388% Dividend Yield
  2. Starhub - 4.878% Dividend Yield
  3. SIA Engineering - 5.7971% Dividend Yield
  4. ST Engineering - 4.7761% Dividend Yield
  5. Nikko AM STI ETF - 1.3881% Dividend Yield (won't be investing yet for this first round)

So, lets do a calculation on my investment and my possible return in 2015. Do note that from tomorrow (19/1/2015) onward, the standard lot size will drop from 1000 to 100. 

Singtel with a price of $3.89 - 4 lots ( $1556)
Starhub with a price of $4.10 - 4 lots ($1640)
SIA Engineering with a price of $4.14 - 4 lots($1656)
ST Engineering with a price of $3.35 - 4 lots($1340)
Nikko AM STI EFT with a price of $3.35 - not for now

With the total investment of $6,192 + commission ($10 each) $40 = $6,192 + $40 = $6,232

So, lets take an estimated draft on how much I will make (excluding capital gain/loss)

Feb - 
Mar - 
Apr - (Starhub) $20
May - (ST Engg) $48, (Starhub) $20 
Jun - 
Jul - 
Aug - (Singtel) $40, (Starhub) $20, (SIA Engineering) $72
Sep - (ST Engg) $16
Oct - 
Nov - (Starhub) $20, (SIA Engineering) $24
Dec - 
Jan - (Singtel) $27.20

With this, I will gain a total of around $307.20 of return with a dividend yield of 4.9%, which is nearly 5%. Depending on the dividend paid date and other information to take into account, I will actively invest in these four blue chips plus adding in more companies to stabilize my portfolio.

So why not make it a full round off of 10k, well, the reserve funds of 3.5k will be KIV for the investment in few months time.


  1. Hi James

    Look out for both ST Eng and SIA Eng.

    I believe you have used their historical dividend rates to compute the yield.

    The former has dropped earnings so dividends are likely to be reduced upon lower earnings while the latter is reducing payout ratio, So they will not yield as high as you mentioned up there.

    1. Hi B,

      Thanks for pointing that out. Yes, I was using their historical dividend for calculation. Well is just an estimated calculation, which enables me to give myself a rough idea how much I will be able to achieve.

      Certainly there is a change howvever, the dividends might go down a little not sure how much it will impact. Well we have to see this actual information in 2015.

      Personally, I will be more focus on telco industry for the start and also I have purchase Soilbuild business space reits today, hope it will do well

      Thanks for pointing that out to a newbie like me :D Really Appreciate