Subscribe to RSS feed Why and How I Use Dividend Strength

By evankoh posted on 24 Jun 2016  -  4,573 views


As many of you would know, I initially built SGXcafe for my personal investment needs. Hence many tools here exist because I use them personally for my own investing.

iAssist and iSuggest were tools that I built in an attempt to help me diversify my portfolio as it was rather challenging to decide which stock to add to my portfolio among the several hundred stocks listed in SGX.

However, there is a flaw in simply just trying to diversify. I did not really attempt to discriminate between "good" and "bad" stocks explicitly and I actually ended up with some "bad" stocks in my portfolio. In my attempt to recognize "good" stocks - which I loosely define to have a positive (green) P&L after factoring in dividends - I created Dividend Strength. By applying machine learning techniques on fundamental data that I have, Dividend Strength identifies stocks that will be able to pay good dividends, year after year.

Many of the stocks that I added to my portfolio were before I created Dividend Strength. So when Dividend Strength was first ready, I used it to look at my own portfolio and found that many stocks that are green were those with high Dividend Strength, and many stocks that were red were those with low Dividend Strength. That gave further validation that Dividend Strength was indeed on the right track.

In fact, if you look at my portfolio now and sort it by Dividend Strength, you would still see the same trend because I have yet to sell the "bad" stocks as I haven't devised a good way to time when to buy/sell. Speaking of which, perhaps I should develop a tool that uses technical analysis to try to decide when to buy/sell...

Nowadays, I mainly add stocks into my portfolio which helps in diversification and have strong Dividend Strength. This is why and how I use Dividend Strength.

How about you? How do you make your investment decisions? What are the features in SGXcafe that have been helpful in your investment decision?


Like
5 likes
4 comments

amit - I agree and that is why when we met I highlighted that SGXCafe could be an ultimate tool and destination for Dividend Investors. Please keep up the great work and it is good to see that the founder of SGXCafe is humble and continues to learn! We are all learning and it is key to have a growth mindset.
24 Jun 2016 10:42:56

cyberpigworld - Do there have any strategic on how to invest in Singapore stock? Because I am new in SGX market, and I can see most stock is not volatile. Hope you guys can give me some suggestion.
24 Jun 2016 12:39:17

orion - Hi Evan, great to see you continue to evolve the site and explain the advantages. Can you please check Global Logistic Properties entry in iSuggest, as it has a "green" 71.09 in iAssist but does not appear in iSuggest. Thanks.
25 Jun 2016 11:07:45

evankoh - Hi Orion,

It is because of this -> "Stability is measured by stocks that have been giving out dividends for at least the last 5 years and has good liquidity."

iSuggest does this filtering whereas iAssist. You might wonder why iAssist do not have this filtering. It is because iAssist only rank stocks that are in your watchlist hence it is assumed that you have already done some form of filtering.

Of course, this can and should be be improved. I will be working on features where users can determine the filtering.

Cheers,
Evan
25 Jun 2016 16:19:44



Next Article > < Previous Article
Improved Portfolio Reporting Updates: Visualization, Watchlist ...



List All Articles Other articles by evankoh

MemCached For A Faster StocksCafe
Since the drastic move to re-architecture StocksCafe and adding support for two new markets at the same time in April, StocksCafe website have became slower. I am aware of that and have been taking significant amount of time trying to improve it. To be very honest, I am not 100% sure what is the true cause although I am inclined to think that it is due to a summation of reasons such as poor database ...

Portfolio Changes: Current Cost vs Closed Cost
Wrong Total Cost Recently, a user highlighted that Total Cost in StocksCafe was computed wrongly and he (I assumed it's a he based on the username) is correct. I previously computed Total Cost as "Sum of [buy price x number of shares] for each stock currently in portfolio". However, this is inaccurate as he has pointed out, and I agree. Therefore I have changed the definitions of Total Cost and also ...

A Simple Trend Analysis of Dividends
One factor that affects whether I purchase a stock or not is how much dividends it gave out last year, and for how many years it has been doing so. This is because when I purchase stocks, I am hoping mainly to benefit from dividend gains rather than capital gains. One obvious question would be: how much can we rely on the dividends that was paid out in the past to predict future dividends? One might ...