Is 6% Dividend Yield Achievable FOR THE Singapore Market Investment Portfolio? In my earlier post over a decade Financial Independence Target, I laid out the strategy to compound our money to reach financial self-reliance in a decade. The strategy involves creating a dividend yield of 6% in the investment portfolio.
There are quite a few questions on whether 6% dividend yield is achievable? Also, how do we get that 6% dividend produce? In my years of investing experience, I’ve learnt that it’s indeed attainable to get the 6% dividend yields inside our investment portfolio. Over the years, I’ve learnt to choose some good stocks that have generated on average 6% or even more dividend produce for my collection.
Some of these stocks I’ve held it for quite some time and they are still generating steady and good dividends for me personally. Actually, the dividend yield should increase through the years if it is a good stock and of course the price tag on the stock increase too. Above are 11 stocks and shares in my portfolio which are generating typically 5% and more dividends.
With the exception of Singtel, all the stocks are producing 6%-8% dividend yields for me. Unfortunately, most of the stocks aren’t offering more than 6% dividends produce based on current price. I bought most of the stocks when the price was lower significantly. If you have missed the boat, fear not because there will always be an opportunity to buy stocks at lower prices again. When the marketplace is bad, that is the time to buy.
But, it is important to pick good stocks so that they can ride out the bad financial situation at that time. Let me talk about some tips and what to consider when identifying companies to buy centered solely on my experience to achieve the 6% dividends produce. The first thing you will understand is that REITs and business trust are the answer to get higher dividend produce.
- Term structure
- Stock Market: [Dividends]
- White Collar
- A mixing machine
As in comparison to blue potato chips such as Singtel, DBS, or other big companies, the dividend distributed by REITs and business trust is mainly higher due to the fact they are income generating possessions. They own assets which they rent out to get rental income. REITs also have to hand out at least 90% of their income to shareholders in the form of dividend. As dividends receive right out of the rental income that your business or REIT trust get, the sustainability of it is important. If you invest in a retail REIT such as Capitamall or Suntec, the retail sales, traffic circulation, and the positions of the walls shall affect its local rental income.
Economic changes will also impact its rental income. For instance, there’s been discussions that retail sales will be affected because of the emergence of online shopping. If lesser people shop at the stores, the stores will have a lesser income and therefore may not want to renew their lease. If the shop space is left empty, the local rental income will be affected then.