In my opinion, this is a must-have trading strategy for 2013 for medium-term traders or investors. This strategy is more or less emulate the big cap list strategy with a little twist. It would consume less of your time monitoring your portfolio on daily basis but could offer a fairly good return with a minimal risk.
I have been back-testing this strategy at The Star business 'My Portfolio' section.
Big Market Capital
Screen for listed companies on the Main Board that have more than RM 10 billion market capital. There are considered as blue chips companies with strong fundamental business and revenue streams. The FTSE Bursa Malaysia KLCI Index comprises of the largest 30 companies by full market capitalisation on Bursa Malaysia's Main Board. You may see stocks like PPB Group Berhad, YTL Power International, Axiata Group Berhad, Felda Global Ventures and Petronas Gas Berhad.
Government Linked Companies
From the largest 30 companies, identify companies that have government linked companies (GLC) status. GLC companies are controlled by Malaysian government via Federal Government-Linked Investment Companies. In addition, Malaysian government also has a power to appoint members of board of directors and senior management positions.
From that 30 companies, GLC are including Malayan Banking Berhad, Sime Darby Berhad, CIMB Group Holdings Berhad, Petronas Chemical Berhad and Axiata Group Berhad.
Dividend Yield
Again, a simple calculation of dividend yield would mark an ability of a company to pay out dividend each year. It may pay on quarterly or annually basis. However, the bottom line is it represents the return on investment for owning a stock. So hence, you should be interested to look for stocks that have high dividend yield.
On Bloomberg, the easiest indicator would be 'Dividend Indicated Gross Yield'. The yield range that we are looking for is between 2% - 7%.
Lowest Price
The last filter is to select probably five stocks with the lowest price. With no preference, now you have a top five big market caps government linked companies with a good dividend payout record at a bargain price.
At the beginning of the year, buy equal amount of each stock. The aim is to hold these stocks before liquidating them in the final quarter of the year. Check your position and stock performance perhaps once a month or a quarter. If the performance of the stocks went south for more than 5%, you should be selling it to cut your loss. However, it also depends on your risk tolerance.
Happy New Year and Happy Trading!
I have been back-testing this strategy at The Star business 'My Portfolio' section.
Big Market Capital
Screen for listed companies on the Main Board that have more than RM 10 billion market capital. There are considered as blue chips companies with strong fundamental business and revenue streams. The FTSE Bursa Malaysia KLCI Index comprises of the largest 30 companies by full market capitalisation on Bursa Malaysia's Main Board. You may see stocks like PPB Group Berhad, YTL Power International, Axiata Group Berhad, Felda Global Ventures and Petronas Gas Berhad.
Government Linked Companies
From the largest 30 companies, identify companies that have government linked companies (GLC) status. GLC companies are controlled by Malaysian government via Federal Government-Linked Investment Companies. In addition, Malaysian government also has a power to appoint members of board of directors and senior management positions.
From that 30 companies, GLC are including Malayan Banking Berhad, Sime Darby Berhad, CIMB Group Holdings Berhad, Petronas Chemical Berhad and Axiata Group Berhad.
Dividend Yield
Again, a simple calculation of dividend yield would mark an ability of a company to pay out dividend each year. It may pay on quarterly or annually basis. However, the bottom line is it represents the return on investment for owning a stock. So hence, you should be interested to look for stocks that have high dividend yield.
On Bloomberg, the easiest indicator would be 'Dividend Indicated Gross Yield'. The yield range that we are looking for is between 2% - 7%.
Lowest Price
The last filter is to select probably five stocks with the lowest price. With no preference, now you have a top five big market caps government linked companies with a good dividend payout record at a bargain price.
At the beginning of the year, buy equal amount of each stock. The aim is to hold these stocks before liquidating them in the final quarter of the year. Check your position and stock performance perhaps once a month or a quarter. If the performance of the stocks went south for more than 5%, you should be selling it to cut your loss. However, it also depends on your risk tolerance.
Happy New Year and Happy Trading!
