Dear Smart Investor,
At the forefront of everyone’s minds today is Russia’s invasion of Ukraine.
It’s hard to fathom how much the situation has escalated since last Thursday.
The war that Russia has brought to its neighbour’s doorstep has drawn a swift rebuke.
On Saturday, the European Union, United States, and its allies announced that they will cut off a number of Russian banks from the SWIFT payment system.
Subsequently, the Russian ruble plunged to a record low against the US dollar.
The move comes on top of multiple sanctions last week to freeze Russian assets and to restrict the country’s travel and trade.
With the news changing by the hour, it’s hard to keep track of all that is happening.
To say that the outlook is uncertain would be an understatement.
The wrong timing
Buying opportunities almost never look like one.
In January 2020, on the eve of the COVID-19 virus hitting our shores, we started The Smart Dividend Portfolio with a scant idea of what is about to come.
Less than two months later, the Singapore stock market plunged, erasing close to a third of its value within a matter of weeks.
Thankfully, investing is not defined by what you do at a single point of time.
We kept adding shares to our portfolio, month after month, amid the uncertainty.
Today, the portfolio is sporting a net asset value gain of 35% since its inception.
Taking a step at a time
There isn’t a need to add stocks to your portfolio at the lowest possible price.
Take DBS Group (SGX: D05). We bought shares in April 2020, paying S$19.34 per share.
The price we paid wasn’t the lowest. Not even close.
After all, shares of DBS had fallen below S$17 just weeks before we hit the buy button.
As it turns out, we didn’t need a perfect entry price.
By the end of the year, shares had risen to over S$25, before further climbing to almost S$34 today.
The example above shows that we do not need to obtain the lowest price to earn a solid gain.
And that’s not all that we got from DBS.
Dividends while you wait
As we waited patiently for DBS shares to appreciate, the local bank continued to pay dividends every quarter.
The dividends collected since April 2020 have amounted to S$2.04 per lot, adding to our gains.
There is more good news to come.
DBS has signalled that it will be paying an annualised S$1.44 per share for 2022, an increase of 9% from 2019’s dividend.
Get Smart: Simplicity and patience
As you can see, keeping it simple works.
We remained disciplined. Our goal remains the same: to find the best dividend stocks we can in Singapore, and buying them, month after month.
We were patient in letting the business appreciate, knowing full well that we are not able to predict many of the events that unfolded ahead of time.
Yet, the simple actions married with patience can deliver outsized rewards like what we’ve seen.
Thank you for coming on this journey with us as we invest for the long term, to build a better and stronger financial future.
First-time investors: We’ve finally released our beginner’s guide to investing. Read it in an afternoon, follow the principles, pick an investing style and buy your first SGX stocks within the next few hours! Click here to download it for free.
Disclaimer: Chin Hui Leong owns shares of DBS Group.