When I was young, I love to play duckling fishing whenever my parents brought me to the fun fair. I love the anticipating feeling when we have no idea what rewards the duckling will give. It feels awesome when we get to pick the duckling with a number that gives great rewards, and quite disappointing when it does not have any rewards.
This is much related to our stock market now. Imagine that the small pool is Bursa Malaysia, and the ducklings are the stocks. The only difference between stock investing and duckling fishing is, we can study and analyze the probability that the duck will give us any reward at the end of the day.
Today I would like to share to you on how do I pick a stock to invest for dividends. By default, I always aim for the stocks which give at least 5% dividends. If it is less than 5%, I would rather put my money in a fixed deposit account during promotion, which guaranteed to return us at least 4% of interest.
Yet, only blindly aim for dividend yield is not a smart way of dividend investing. There are many companies that give lucrative dividends to lure innocent investors. Hence I compiled my 5 criteria which I used to determine if a stock is worth to invest for dividends.
p/s: I apply the same evaluations on blue-chip stocks and REITs.
