General rule of thumb

As i was text messaging the dividend declaration of some funds to all my friends and clients, i received a  short text message reply from one of  them. The sender replied saying that "NLFCS and FELDA gives 10% and 16% respectively, and that is good".
I didn't know what he meant by that but my consciousness whispered to me implying that probably NLFCS and FELDA pays better dividend than Public Mutual Bhd. Public Index Fund (PIX) did well for its financial year end 31st January 2012 and Public Mutual Bhd declared a 8.20% dividend yield. (Please read my article posted on February 1st 2012).

I replied back to him by texting this, " That's good and all the best to you".

Let's examine the scenario here.

On my blog article prior to this one (see February 1st 2012 article), the holding period of your investment capital prior to (the cum-dividend date) was 22 days (January 9 - January 31).
In the cases of NLFCS and FELDA, the return mentioned in my friend's text (10% and 16%) could only be realised after holding the capital for 1 year or 365 days i.e., after closure of the financial year.

8.20% in 22 days
10% in 365 days
16% in 365 days.

To see all these 3 yields in one dimension, i have simplified and brought to you an easy way of comparing the best investment dividend yield product. It's a general rule of thumb.

For every 22 days NLFCS produced 0.603% and FELDA produced 0.965%, but PIX produced 8.20%!!


Note: NLFCS stands for National Land Finance Co-operative Society Ltd
         FELDA stands for Federation of Land Development Authority.