Dr Chan Yan Chong’s latest book, whose title translates to He Who Is Financially Free 4: Insights into Eight Big Profiting Opportunities in the Stock Market (富足自由人4), has been published in January this year.

This book is the fourth one in the series, and it sums up Dr Chan’s wisdom that enables him to profit from the stock market. In the book, he tells readers how to find income stocks, how to make meaning of large shareholders’ transaction and repurchasing activities, and how to speculate in penny stocks, etc.

The other three books cover Dr Chan’s philosophies when it comes to purchasing shares and properties, as well as some basic knowledge on finance and economics.

Buy Income Stocks to Combat Rising Fees

In one of the chapters, Dr Chan points out that some monopolies in the utilities sector (e.g. water, electricity, gas, public transport, etc) might be raising their fees every year. According to him, the best way to combat that would be to buy the shares of these companies, hold them for long-term and earn dividends.

In addition to that, Dr Chan believes that utility stocks and REITs will pay dividends that are higher than banks’ deposit interest rates due to loose monetary policies implemented by central banks around the world. This makes utility stocks attractive to conservative investors.

Speaking of dividends, The Fifth Person will be conducting a course “DividendMachines”, which will be teaching investors how to select and obtain passive income from income stocks.

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Click here to find out more about DividendMachines

The Guiding Principle behind Buying Income Stocks for Dividends

Investors need not be too concerned about the rise and fall of the stock price if their aim is to collect dividends, said Dr Chan.

In his book, he even writes: “Income stocks are always suitable for holding long term or even ultra long term, for a decade or two…”

Besides picking stocks of outstanding companies, investors would need to enter the stock market at the right time. So, what is a good time to buy?

Dr Chan’s criteria are simple. He points out that dividend yields decrease when stock prices rise, and that is when one should not be buying. But investors can consider buying when stock prices have adjusted, and when dividend yield has risen to a decent level. He also stated that investors can use 4 percent as a benchmark. In other words, stocks that issue a yield below 4 percent might not be worth buying.

Income Stocks in Singapore and Malaysia

He Who Is Financially Free 4 mainly features Hong Kong stocks, with examples including Link REIT (0823.HK), CLP Holdings Limited (0002.HK), HK Electric Investments Ltd (2638.HK), and HK & China Gas (0003.HK).

Being accustomed to the modern lifestyle, we cannot live without water and electricity supply, public transport services, as well as telephone and Internet services, etc. If you see necessity and dividends as two key criteria in stock selection, you might want to consider owning the below income stocks in Singapore and Malaysia.

Singapore Stocks

Public Service/Utility:

Keppel Infrastructure Trust, Sembcorp Industries, AusNet Services

Public Transport:

ComfortDelGro Corporation, SBS Transit

Telecommunications:

Singtel, StarHub, M1

Malaysia Stocks

Public Service/Utility:

Tenaga Nasional, Gas Malaysia, YTL Power, YTL Corp, MMC Corporation

Telecom and Television:

Telekom Malaysia, Maxis, Axiata, DiGi.Com, Astro Malaysia

The above are just some examples. If you know of other income stocks in the Singapore and Malaysia markets that offer good dividends, drop us a comment below this article on our Facebook page!