My Stock Selection Criteria

Referring to the previous article on my investment philosophy, I focus my stock investment on high growth dividend stocks that yield at least 5% p.a. as well as REIT stocks. To further narrow down the list of investment grade stocks, I will highlight the criteria that i use to filter through the stocks in this article.

One resource that i use extensively in my quest to find my investment grade stocks is Stock Performance Guide from Dynaquest. This book provides segmental information, corporate structure, business activities, latest developments and future prospects of listed companies in Bursa Malaysia. It also contains investment and financial statistics data about each listed company. The data that i most commonly use from this book is Dynaquest rating and 5-year dividend yield range. You may get this book from here or any other major book stores in town.

Schroder: Go for dividends

A convergence of global and domestic influences makes 2012 an opportune time to invest for dividends in Asia.

Schroder Investment Management Ltd said its research showed that Asia, besides boasting the strongest economic fundamentals in the world currently, also had one of the highest dividend yields globally. It was second only to Europe, where the unfolding debt crisis continues to raise questions about dividend sustainability.

“Despite the market's obsession with share price appreciation, historically almost two-thirds of long-term equity returns in Asia have come from dividends,” Lee King Fuei, a Singapore-based fund manager for Asian equities at Schroder, argued in his latest report on the outlook for Asian equities for 2012.

UPDATES: SSPN Historical Dividend Rate - 2011 Dividend Rate!

Skim Simpanan Pendidikan Nasional (SSPN) is the government guaranteed national education savings account which is available for all Malaysians. There are some advantages of investing in this scheme, as follow:

1. Tax relief on savings in the scheme up to RM3,000 - you can actually shaved off up to RM780 from your tax submission (based on maximum tax bracket of 26%), depending on your current tax bracket.
2. Free general insurance up to maximum RM50,000 - only for depositors with deposits of a minimum RM1,000
3. Higher dividend rate as compared to fixed deposit rates and tax exemption for dividend

When to give your fund manager the axe

Investing a bit in mutual funds is a bit like running a pro football team. Everything is fine if you make the playoffs or see the progress you expected, but if a season ends and the numbers are ugly, you want to fire the coach.

That’s what many stock mutual-fund investors are going through now. Dim 2011 results from fund managers is enough to convince them to “Throw the bums out.”

Alas, that knee-jerk reaction to raw numbers can create problems.