Dear readers, if you are investing in Singapore stocks for dividends, I believe this strategy is likely to be risky in current stock environment.
In this current stocks markets backdrop, businesses of many sectors have faltered and it is very likely that the dividend streams of many stocks are likely to be cut or even stopped.
I know that there are many investors who have built up an impressive portfolio over the years which can generate good passive dividends year after year for them. But the likelihood of business cutting or not paying dividends post-Covid is real.
In the eventuality of no dividends or reduced dividends, the investment portfolio will be generating less or no dividends and it will just be lots of capital put to waste.
Worse, if the capital has fallen below the buying price. Some may say if the aforementioned situation were to materialise, this period would be brief. But that is really no telling how long businesses will be impacted.
I would like to advise investors to start relooking at their investment portfolio to see whether they have really parked a large part of their capital in investing portfolio which to me is risky in these uncertain times.
As sharing, I have started streamlining my investment portfolio since 2018, selling stocks which I have held for profit. Cutting losses for stocks which were clearly mistakes. And make fewer newer investments since 2018. And, as I have shared with readers many times on this blog, I have started to build up an investment warchest to invest when the stocks markets correct next.
The markets are still very volatile with the downtrend the evident trend. With the upside potential limited. We need to wait for the “dust to settle” before investing. And I think this will come when the stocks markets correct next.