A Review of 2016

The Year 2016

I achieved a huge milestone during the year 2016. For the first time ever, my annual dividends surpassed the RM10,000 mark.

As most already know, I received a total of RM11,429.55 in dividends last year giving me a yield of 3.84%. In 2015, I received RM7,544.14 in dividends. Guess what? That’s a whopping 51% increase in passive income for me!

That being said, I did increase my gross investments by RM43K.

No.StockQuantityGross Investment (RM)Dividends (RM)Div. Yield
1AXREIT1423624,313.661,049.064.31%
2BONIA3370026,990.33421.251.56%
3CBIP1400022,304.801,280.005.74%
4CYPARK820017,681.66410.002.32%
5ECOWLD900012,960.00--
6HOMERIZ2445014,127.211,100.757.79%
7IGB REIT2280029,986.561,673.075.58%
8MAYBANK316825,723.211,070.004.16%
9NESTLE20013,376.00540.004.04%
10PBBANK60011,100.00156.001.41%
11SCICOM840017,472.00168.000.96%
12SCIENTX380022,267.24950.004.27%
13SUNCON360586.8023.404.06%
14SUNREIT1360019,839.681,172.025.91%
15SUNWAY360011,264.04396.003.52%
16TAANN26009,282.00130.001.40%
17TUNEPRO1080018,503.64540.002.92%
18SOLD STOCKS (Air Asia & AFG)350.50
297,778.8311,429.553.84%

Capital Gains & Dividend Payout

Dividend Magic - Capital Gains

Gross Investment: RM297,777.83
Market Value: RM345,955.92
Dividends (2016): RM11,429.55
Total Gain: 14.69%

For 2016, the unrealized gain for my Freedom Fund was RM41,416.19 giving me a 10.85% yield. Couple that with my 3.84% dividend yield, total gains for 2016 totals up to 14.69%. Total market value of my portfolio now is RM345,955.92.

The year 2016 has been pretty awesome if I do say so myself. However, my main focus has and will always be on that 3.84% dividend yield. My main aim is to increase that yield every year.

REITs

Last year in terms of dividend payments, all the REITs did well for me. The top ones would still be Sunway REIT as well as IGB REIT for me. Somewhat of a disappointment would be Axis REIT but their refurbished properties should be bringing in higher income in 2017.

Banks

My purchase of Maybank as well as Public Bank has been fruitful. They’ve each given me a 4.16% and 1.41% yield respectively. (Public Bank’s is low here because I only received 1 dividend payment).

I also disposed of Alliance Bank’s shares in December as the shares have had a lackluster few years and I don’t see any changes being made. I took a painful 16% loss on that. The funds will be put to better use.

My Favourites

Homeriz and Scientax, the two golden eggs in my basket have been providing not only in the form of dividends but in capital gains as well. Scientax has continued to soar in 2016, as of today (8 Jan 2017), I have an unrealized gain of 130%.

Disappointments

Thankfully, last year the only major disappointment came from none other than Bonia Corp. I was previously up by more than 100% but currently making a loss of 22%. I’ll continue to maintain my position with Bonia because they do have sound management and I foresee a big increase in sales in the next few years. It might be time to top up early this year to average down.

Goals for 2017

Moving forward, 2017 will be the year I achieve RM12,000 in dividends. Even without adding to my portfolio, the magic of compounding will see me achieve that target. And I’m sure everyone knows what RM12K a year in dividends mean.

Yes! That’s an average of RM1,000 cash for me. It has always been a long term goal of mine and finally it is within grasp.

With additional funds being reinvested, I hope to achieve RM15,000 in dividends next year while at least maintaining my 3.84% yield. Hopefully increasing it to 4%? A long shot I know.

4% Dividend Yield

That coveted 4% yield. I’ll be focusing more on REITs this year whose high yields will help me achieve this target.

For the readers

For you guys and girls, I’d like those of you that hasn’t started investing to make it a point to do so this year. The first step is always the hardest but let me assure you it will be rewarding. Let 2017 be the year you get your finances in order.

I’m here to assist you. If you have any questions, no matter how trivial you feel they are, please fire away!

End.

So here’s to an awesome 2017 to everyone! Onwards and upwards!

Thanks for reading!

Dividend Magic - We can do it!

 

26 thoughts on “A Review of 2016

  1. Hi Divvy
    First of all, thanks for writing such a motivating blog on financial independent and investment!
    I wish to say that I wish I read your blog much earlier and invest in my younger days too. Now, it is probably too late, but I still want to do it.. to invest. I intended to start my investment in REIT this month but I am still green on the best timing to invest.

    Need your advise on this.
    1. Can you share when is the best time to invest in REIT.. example those that you invested in?
    2. Aside from the current price of the REIT, normally the best time to invest is after the dividend payout?
    3. Any idea when dividend is paid for Sunway Reid, Pavillion, AXis and how many times are their payout per month?

    Look forward to your advise and thanks in advance.

    Regards
    Tameying

    • Hey Tameying,

      Thank you for writing in and for the really kind words.

      Yea, the whole purpose of this is so our younger generation will hopefully take up a more active role in managing their finances and investing. Even if it’s too late for some of us, we could always ensure that the generations to come will appreciate the power of investing early.

      As for your queries,
      1. At the cost of sounding a little cheesy, the best time to invest was 10 years ago. Second best time is now. =D
      There is no real best time, you could always wait for a dip in price due to a market recession.

      2. And no, that’s a misconception. You are right in the sense that in theory, a stock’s price will go down in value by the amount of the dividend. As the amount of dividend was adding to the value of the company, but now has been paid out to the shareholders, so now the company is worth less by the value of the dividend. However, in real life, this may or may not happen. Sometimes the price will drop by less than the value of the dividend. Sometimes the price will drop by more than the dividend. And other times the price will go up even though the stock has gone ex-dividend.

      We can say that if the price has dropped by exactly the amount of the dividend then there has been no change in the stockholders value, if the price has dropped by more than the value of the dividend then there has been a drop to the stockholder’s value, and if the price has gone up or dropped by less than the value of the dividend then there has been an increase to the stockholder’s value. So it all depends on what the market expects of the company’s dividend.

      3. According to my amateur-ish records:
      Axis REIT pays out its dividends 4 times a year – March, June, September, and December.
      Sunway REIT is the same as Axis.
      As for Pavilion, I don’t own the stock but you can find the information online. Just do a google search. Hope this helped!

  2. Hello Mr Magic,

    Would like to pick your brains on ETFs please, i ve heard that they are relatively low risk compared to stock picking, as they are diversified in nature – what do you think of them as a medium term investment?

    Thanks!

  3. Hey Divvy, get to know your blog from your contribution to LYN FSM thread.
    Personally have reached Stage 6 of the FI with more than 40k interest pa generated from FDs.
    Have just withdraw 10% of my portfolio and invested in UTFs.
    Planning to start investing in KLSE.

    However, the above shows that your dividend yield in 2016 is 3.84% which is lower than promo FD rates.
    (Doing FD musical chair can get consistently 4% pa and above).

    Capital gains in shares are not guaranteed. So what make you think that investing in share market is a better option ?

    Mind to enlighten me ?

    • Hi David,

      Welcome to the site =D
      Stage 6! Congratulations my friend. And whats more, you’re doing it with only FD.

      Could you tell us abit about yourself? How old are you now and how did you manage to achieve FI?

      As for the age old question of why stocks over FD. Its the potential returns of course. And our good old friend Mr. Inflation.
      With FD, you basically have that maximum 4% return, factor in inflation and you have nothing.
      3.84% is my dividends / passive income, which should surpass FD rate very soon provided I stop with new additional stock purchases.

      So in short, returns come with risks. If you’re already Financially Independent and content with your streams of income, you will not see the benefit of risking your money anymore for further growth.

      Hope I answered your queries. Looking forward to hearing about how you achieved FI! Really commendable.

      • Hey Divvy, I am 44 this year and reach FI through working and saving. Not doing any other investments in between, any extra money available just contribute to FD. As time goes by, the amount in FD has reached 7 digits.

        As I am going to retire soon, realized that the max 4% return from FD may cover the daily expenses but the capital will shrink due to inflation.

        That’s why diversifying some of the capital to riskier investments such as UTF and stocks.

        For stock, wish to look for some counters with low volatility and at the same time give reasonable DY (>4%).

        Any recommendations please ?

        • Hey David,

          Only 44 and already financially independent. That’s a real feat.
          Hardwork, savings and some budgeting can really go a long way and you’re proof of that!

          And you’re right, your capital will eventually shrink.
          For retirement, the most suitable would be REITs my friend. Your yield should easily reach 4-5% at the correct purchase price and will continue to grow in the long term. You should go for it.

          I’ve written a guide on REITs. http://dividendmagic.com.my/the-complete-guide-to-reits-in-malaysia/
          Hope it’ll help.

  4. Hi, been following your blog for awhile. Im 23 this year, been working for few years and have some extra money to start investing in shares. Just a quick question, your gross investment is 297k, market value is 345k. Where do you get the market value from? Is that called capital gain besides the dividend gain?
    Thank you in advance.

    • Hey Rais,

      It’s great to hear from you. Kudos on starting your investment. Well on your way to financial independence.

      Yes the difference is what we call capital gain. To be exact, its actually unrealized capital gain. Market value is how much the price is trading on the market right now. I got 345K back in December.
      Hope this helped. And as always, please let me know if you’ve got any other questions. Always happy to help. =)

  5. Came from Mr Stingy’s most recent post and I must say there are many things I can put into practice. If only I started early like you.

    Four years in, I have about 19k invest with about 25% in the stock market. I could really use any input to grow this. Been tracking expenses and putting my money to work on a 30k/year salary.

    I’m certain 2017 will be better. Taking your lead, I’ll invest with a higher amount to reduce cost. Looking back at the spreadsheet, it was indeed foolish to incur a 2.5% cost for one counter.

    Question: Starting with 3k – 8k each transaction, do you your orders partially matched frequently?

    Thanks for writing!

    • Hey JC,

      Nice to have you here. Can’t thank Mr. Stingy enough.

      First of all maybe you can let us know your age to get a better gauge on how you’re doing.
      As I’ve always said, the crucial step is to actually start investing. From there, you need to save up and consistently add to your positions. Maybe quarterly or half yearly when the price is right of course.
      Are you investing in growth stocks or dividend stocks?

      I don’t usually get partial matches with that amount. But then again, I don’t place orders and wait. Normally, I just buy at the current asking price.

      Looking at the big picture, a 1 or 10cent difference in price isn’t worth worrying over in the long run. Once you’ve identified a good and undervalued stock, go for it. The time spent waiting for that 10 cent price difference could actually cost you.

      Hope I addressed all of your queries. Thanks for reading and I hope hear from you on your portfolio growth in 2017!

      • Hitting 31 real soon. After doing my bit for the family to avoid losing that only roof over our heads, I’m back at 0 and raring to go. Agreed with buying at the asking price but at times do wait it out especially if I’m in the red by a few sen and need to average down; nevermind the dividend over the quarters already covered that loss many times over.

        It’s just last month that my GTD order got partial matches on both days and I didn’t know until I check my mail 2 days later! Hence, that question for you earlier.

        I’m heavy on REITs (IGB, MRCB-Q, AXIS) and YTL. Sold off Homeritz more than a year back. I’m still green on stock picking especially on what a ‘good’ company really means; of course we all know the 30 giants but it’s the relatively smaller ones that are golden.

        Books and tutorials talk about evaluating their finances / cash or non-quantifiable factors like management ethics / their personal stakes etc. Currently I’m looking at the company with regards to their product and whether theirs is the only solution (moat) or hold big enough influence over their consumers.

        I’m in for the long haul but I try to avoid cheaper stocks with high volumes for obvious reasons though I’m not sure if I’m contradicting myself here.

        You have a good day.

        • Hey JC,

          Glad to hear you’ve got all your affairs sorted. Its time to focus on your money now.

          Everyone will have their own methods of determining stock value and not one person can tell you if you’re right or wrong. Most “professional fund managers” out there can’t even beat the market half the time.
          If your method works, stick to it. As long as you invest for the long term, you’re already half way there.

          You have a good day too and thanks for reading!

  6. Good day,
    How do you identify dividend paying stock?
    Would you recommend to invest oversea stock since ringgit is dropping.

    • First and foremost – good dividend history. Best ones are those that never fail to maintain their level of payout even during bad times.
      Ringgit has already dropped, I wouldn’t recommend investing overseas at all. The last time I made a foreign stock buy was during the US crisis. Price and timing is everything.

      Hope this helps!

  7. Been following your blog for some time, keep up the good work! I’ve also taken my first step in KLSE! Hopefully it’ll be fruitful as well!

    • Hey Ryan,

      Yes!! Its great to hear from people who has started investing. Thanks for letting me know man.
      All the best to you this year!

      Keep us updated =)

  8. Hi boss
    Really impressed what had you done
    Want to ask a permission from you to emulate exactly the stock that you buy

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