Posted on March 3, 2010 - by Drizzt

Dividend Investing:It matters when you buy the stock

A question alot of folks ask about dividend stock is that they aren’t realy defensive when a bear market comes along as the share price will still go down. It would be more worth while to sell then buy back at cheaper price.

What do i think of this kind of move? I am all supportive of it, IF you can foretell future events and price movements well.

Lets say you trust your skill in analysis whether it is fundamental or technical. You see that in the future this stock will go down together in a bear market. How well would you fare?

I created a Dividend Stock Simulation Spreadsheet here to illustrate and analyse this.

I chose CapitaCommercialTrust which is a commercial property reit listed on a stock exchange.

Those lines marked in red are prices where stocks of CapitacommercialTrust will be purchased. On every of these prices stocks will be purchase in this simulation. The question is how much.

Assuming that we would like to divide 20000 shares between these purchase periods. Base on a pro investor who is able to foretell that the trend is down he would likely to add more a 90cents, 64 cents and 78 cents. He will purchase less at 1.84,1.27 and 1.19. Read more…

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1. Stock Valuation and Dividend Sensitivity Analysis:How does price and dividend affect each other?
2. A Guide to Dividend Investing in Singapore Telecom Stocks
3. Net Profit, EBITDA, Operating Cashflow and Free Cashflow in Dividend Investing