This week, the share price of DBS (SGX:D05) plummeted by more than $5 or 10% following the US president's global tariffs announcement, igniting trade war fears and amplified concerns of a global recession and economic slowdown.
I smelt blood on the streets, pounced on my passive income greed to catch the falling knife amidst the global fears to add some DBS shares using idle SRS funds.
There it goes.
Ideally, I would prefer to add DBS at below $40 and the time is now.
At its peak of $46, DBS has a forward yield of more than 6.5% assuming annual dividend of $3 (inclusive of 4 quarters of $0.6 dividends and $0.15 capital return) and based on less than 60% payout ratio. Hence it is very attractive relative to S-Reits which pay at least 90% of their income to achieve more than 5% yield.
In the past weeks, DBS has been buying back its own shares at between $36 and $44 as part of its $3 Billion share buyback programme. Hence, I feel that at $38, DBS is fairly valuated by the markets to factor in its future lower net interest margin income, greater uncertainties and lower growth prospects.
I am determined to make the idle funds in my SRS work harder after they were recycled from the sale of ST Engineering in my SRS portfolio last year.
It is crucial that long-term investors like us always remain calm, unwavered and focused on our investment objectives.
While the share prices of local banks and US tech stocks may remain volatile and continue to tank, we have nothing to fear if we are in the game for the long haul.
I shall continue to monitor and shall not hesitate to add more local bank or other great company shares for alignment with my investment objectives in the future.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and after careful consideration of risks and potential rewards.
Thanks for reading.
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