To some, investing in the stock market can seem daunting. Stock market investing is a complex world reserved for financial experts.
It doesn’t have to be the case. Here at The Smart Investor, we like to keep it simple.
Let’s take Co-Founder David Kuo’s preferred investing style, income investing.
He calls it “salary independence” and it is an enticing concept because it frees you from the drudgery of daily work, allowing you to pursue your hobbies and passions.
Here’s something you should know about David’s investment philosophy.
He invests in solid stocks that pay him a dividend.
These are typically strong businesses that can weather economic cycles and deliver dividends year in and year out.
He also invests for the long term and can patiently wait for businesses to grow not just their profits, but also their dividends.
The idea here is to build and grow your dividend stock portfolio to a point where you can rely on it to generate an income equivalent to what you are earning from your day job.
Growing your dividend pot
How do you go about finding reliable dividend-paying stocks?
The REIT sector is a good place to start looking.
You can scoop up REITs with strong sponsors such as CapitaLand Integrated Commercial Trust (SGX: C38U), Mapletree Industrial Trust (SGX: ME8U), or Parkway Life REIT (SGX: C2PU).
Then, there are also real estate companies that pay a solid and reliable dividend.
Some examples include Hongkong Land (SGX: H78) and Sino Land (SEHK: 0083).
The great thing about dividend stocks is that they can come from every corner of the world.
Link REIT (HKSE: 0823) is a Hong Kong REIT and the largest in Asia and dishes out a dependable distribution while American Tower (NYSE: AMT) is based in the US, owns communication towers, and pays a regular quarterly dividend.
As the saying goes – the world is your oyster when it comes to searching for suitable dividend stocks and you can take your pick of the globe’s best businesses to include in your portfolio.
These and more are part of Kuo’s Income Portfolio (KIP), where David picks businesses that own properties earning steady rental income.
Malaysia beckons
And if you are looking for great stock ideas, just look across the Causeway.
The Malaysian ringgit has outperformed many currencies around the world in the third quarter of 2024 and till date, has appreciated more than 14% against the US dollar.
The Kuala Lumpur stock market (KLSE) is also on a roll, with 28 initial public offering (IPOs) on Bursa Malaysia in just the first seven months of this year.
In fact, Malaysia is now the best-performing IPO market in Southeast Asia.
With a stronger economy and a positive outlook, the country looks poised to do well.
David’s Malaysia Money Machines (MMM) contains a host of solid businesses listed on Bursa Malaysia that are well-positioned to continue doing well.
Heineken Malaysia (KLSE: 3255) brews the beer that everyone enjoys drinking on festive occasions while Nestle Malaysia (KLSE: 4707) manufactures snacks and beverages such as KitKat, Milo, and Maggi noodles that many households enjoy.
The best news is – these businesses also pay out a dividend to boot while posting consistent growth.
Asia’s growth potential
Many investors in the West have been interested in parking money in Asia for a simple reason.
There is massive growth to be found in this region of the world.
Asia’s growth is expected to be fuelled by domestic demand and China and India have the world’s largest populations, making them the ideal countries to contribute to future growth.
The National Bureau of Economic Research’s study has forecast that China and India will become the world’s largest economies in the coming decades, lending support to the belief that Asia is where you should be to enjoy years of prosperity.
David’s Asian Consumer Portfolio (ACP) captures this growing demand as many global companies see Asia as a place for continued expansion.
Whether it’s Visa (NYSE: V), Starbucks (NASDAQ: SBUX) or Apple (NASDAQ: AAPL), these mega companies are turning their attention to Asia to support their growth ambitions, all while paying out quarterly dividends to their shareholders.
Cheers to your health
And let’s not forget that the world’s population continues to age, with Singapore, in particular, set to become a super-aged society by 2026.
Super-aged is defined as a society with a fifth of its citizens aged 65 and above.
By 2030, this percentage will rise to 25% from 20%, making it imperative for the government to make preparations to enable people to age well.
The Asian Healthcare & Wellness (AHWP) portfolio contains a range of businesses that cater to this demographic trend.
For instance, Stryker (NYSE: SYK) produces orthopaedic and spine products that help people to get back on their feet.
Raffles Medical Group (SGX: BSL) owns hospitals in Singapore and China that help to treat chronic diseases and provide care for the sick and elderly.
These businesses will grow alongside the increase in senior citizens while also doling out dividends along the way.
Get Smart: The world is your oyster
The examples above show how you can easily build a solid dividend-paying portfolio by selecting a variety of global stocks.
The lessons that David teaches are timeless and can help you build up a strong investment portfolio that pays out a steady stream of passive income.
Attention: Investors aiming for both growth and peace of mind. We’ve pinpointed 5 SGX stocks known for consistent dividends. If you want to build a retirement portfolio, but don’t want the stress of stock watching, this report is for you. Click HERE to download now.
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Disclosure: Royston Yang owns shares of Apple, Starbucks, Visa, Mapletree Industrial Trust and Raffles Medical Group.
