Nur Syareena Abdullah asked 4 years ago
Hi. What is your take on dividend paying stocks like PETGAS. Should we add them in investment portfolio?
On investment portfolio, should we diversify like some stocks is value investing, some stocks dividend paying, some stocks blue chip…or do you suggest diversity on sector but still uphold value investing method.
NICHOLAS OH answered 4 years ago
When I invest in a stock, I look at the total potential return which may come from dividends and/or capital gains.
There is no point in diversifying for the sake of diversifying. The decision on whether to add a stock should be based on the margin of safety from its intrinsic value. The method of estimating this intrinsic value is the same whether it is a blue chip, dividend stock or value stock and it is arrived after understanding the business, its track record and its prospects.