This is the continuation of the "The Lazy Man Portfolio – A Rethink
". I am breaking it down into several parts so that it is more manageable for my brain and to gather feedback.
|Total Portfolio (stocks only) as of 16-Jan-19
|2019 Projected Dividend ($)
|2019 Projected Dividend Yield (%) based on current price
|2019 Target Dividend ($)
|Dividends shortfall ($)
|Cash on hand
|Yield Target ($)
I set a target of 5% yield of $86,000 which equals to $4,300 dividends in 2019.
My current stocks will give a projected yield of 4.81% which is pretty close to my target of 5% yield. However I have a large cash portion of $35,000 which generates at most 1% interest in my CIMB savings account and the challenge is how to deploy it to make up for the dividend shortfall of $1,928.42.
The simplest way is to invest all my cash into a derivative that gives me 5.51% yield. However that will leave me with zero cash. Although I will still be able to build up my cash reserves ($1,000/month), I won't be able to take advantage of any opportunity if a crisis strike in the near term.
Even if I decided to take the simplest option as mentioned above, I am also not confident in finding one stock that give me a 5.51% yield.
Ideally, I will like to split my cash into 2 to 3 stocks over a period of a few months so that I can minimise risk by diversifying and my cash will not fall immediately to zero. That said, it only adds to the complexity.
Hope to hear from you guys.
Haven’t heard from you for quite a while!
Running the risk of generalisation, I think you can consider adding some REITs which usually offer relatively high yield as an asset class. But of course, the necessary due diligence must be conducted and dividend yield shouldn’t be the only factor to look at.
Hi The Boy who Procrastinates,
Thanks for your comments and yes dividend yield is not the only factor. The lesson I learnt from Hyflux is cash flow and sustainability. REITS is one of my considerations and I will split my cash between two or more asset classes,