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Sri Lanka Equity Forum » Stock Market Talk » Is SWP better than dividend plan?

Is SWP better than dividend plan?

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1 Is SWP better than dividend plan? on Tue Sep 04, 2018 3:29 pm

wasimraza


Stock Trader
Hello guys! I’m a quite a beginner investor in the stock market and planning to invest a fund which can give a regular flow of return on monthly basis. But, I’m quite confused about the systematic withdrawal plan and dividend plan. Some of my colleagues suggested me to invest in the SWPs since it provides a consistent flow of returns on a consistent interval of time (weekly, monthly, and quarterly). Moreover, it is up to the investor to decide on the amount and period of time.
Plus, there is no guarantee to get consistent dividends from dividend mutual funds since it is based on the realized gains. Since I am invested in the stock market I opted out the financial advisory services of Advisorymandi. So, I asked the same question to my financial advisor and he suggested to me the same thing to invest in the systematic withdrawal plan.
But, I’m still confused over this. After all, I can’t just simply invest big capital in anything. So, plz help me out on this one. 

http://www.advisorymandi.com/

2 Re: Is SWP better than dividend plan? on Fri Sep 07, 2018 11:59 pm

DS Wijesinghe


Manager - Equity Analytics
Manager - Equity Analytics
Welcome to the Sri Lanka Equity Forum WasimRaza

I really do not know the SWP you have mentioned but as you seem to be a beginner to stock market let me tell you that you are entering at one of the best times to buy from CSE. Market is struggling for the past 3 1/2 years giving you a better opportunity to buy stocks of great companies at bargain prices

Remember wealthy investors are made through investing in bear and economic recession times rather than in Bull markets

I would summarise and share with you some of the key points recommended by Alexander Graham for a defensive/conservative investor like you. 

1. Do not allocate more than 50% of your investment portfolio to stocks. Keep 50% in safer bonds+FDs

2. Buy stocks of well managed large, conservative companies only 
3. The companies must have a sound dividend track during the past 5-7 year period
[ltr]
4. ALWAYS RE-INVEST THE DIVIDENDS RECEIVED. Remember re-investing dividends is one of the most powerful strategies of sound stock market investing
[/ltr]
[ltr]
5. The companies should have a minimum of 10% compounded annual growth rate in Earning per share(EPS) during the past 5 years
[/ltr]
[ltr]
6. The companies should have a minimum of 10% compounded annual growth rate in net Asset value per share (NAVPS) during the past 5 years
[/ltr]
[ltr]
7.  Always try to buy cheap. Don’t over pay. Check out average and lowest Price Earning ratios when you decide on price point to buy. 
[/ltr]
[ltr]
8.The companies of your portfolio always have to be from the industries you like and familiar. For example don’t buy Ceylon Grain Elevators if you don’t eat chicken meat. If you hate smoking don’t buy Ceylon Tobacco. If you actively care for environment and don’t like plastics don’t buy ACL Plastics

Please get the research divisions of your chosen stock broker to give you the calculation for 5, 6 & 7 above. Sit with your stock broker for at least every 6 months review your portfolio.

If you are planning to be a more enterprising young aggressive investor, always start with small quantities such as 100s and 200s the most.  Don’t try to beat the market at the  beginning but Check out how your judgement works before you start making substantially large investments.


Happy investing in the Colombo Stock Market
[/ltr]

3 Re: Is SWP better than dividend plan? on Sat Sep 08, 2018 8:40 am

Champ is Back


Senior Equity Analytic
Senior Equity Analytic
@DS Wijesinghe wrote:Welcome to the Sri Lanka Equity Forum WasimRaza

I really do not know the SWP you have mentioned but as you seem to be a beginner to stock market let me tell you that you are entering at one of the best times to buy from CSE. Market is struggling for the past 3 1/2 years giving you a better opportunity to buy stocks of great companies at bargain prices

Remember wealthy investors are made through investing in bear and economic recession times rather than in Bull markets

I would summarise and share with you some of the key points recommended by Alexander Graham for a defensive/conservative investor like you. 

1. Do not allocate more than 50% of your investment portfolio to stocks. Keep 50% in safer bonds+FDs

2. Buy stocks of well managed large, conservative companies only 
3. The companies must have a sound dividend track during the past 5-7 year period
[ltr]
4. ALWAYS RE-INVEST THE DIVIDENDS RECEIVED. Remember re-investing dividends is one of the most powerful strategies of sound stock market investing
[/ltr]


[ltr]
5. The companies should have a minimum of 10% compounded annual growth rate in Earning per share(EPS) during the past 5 years
[/ltr]


[ltr]
6. The companies should have a minimum of 10% compounded annual growth rate in net Asset value per share (NAVPS) during the past 5 years
[/ltr]


[ltr]
7.  Always try to buy cheap. Don’t over pay. Check out average and lowest Price Earning ratios when you decide on price point to buy. 
[/ltr]


[ltr]
8.The companies of your portfolio always have to be from the industries you like and familiar. For example don’t buy Ceylon Grain Elevators if you don’t eat chicken meat. If you hate smoking don’t buy Ceylon Tobacco. If you actively care for environment and don’t like plastics don’t buy ACL Plastics

Please get the research divisions of your chosen stock broker to give you the calculation for 5, 6 & 7 above. Sit with your stock broker for at least every 6 months review your portfolio.

If you are planning to be a more enterprising young aggressive investor, always start with small quantities such as 100s and 200s the most.  Don’t try to beat the market at the  beginning but Check out how your judgement works before you start making substantially large investments.


Happy investing in the Colombo Stock Market
[/ltr]

Fair & good advise.
Really agree with one of the best time to enter in CSE.

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