Last Friday night, Ping An’s dividends arrived in my account. This is the first dividend I received from my position. Next, there will be dividends from banks such as China Merchants Bank and China Construction Bank, which can increase cash flow again. So what happens to the funds after the dividend is distributed? Today I will share my personal opinion.
First, let’s talk about the use of funds. After this dividend is paid, I will reinvest it all. Because I work in IT, I am getting older and older, especially when I see young people being motivated, sometimes I do feel powerless. As a middle-aged person, I have become more and more worried about the uncertainty of the future, and I have an inexplicable panic about unemployment. So, keep working and investing in parallel while you still can, and prepare for the future. At present, there is not much left after working income except for household expenses, but I will save it for investment, and strive to cover household expenses through dividends in the future. For the funds after dividends, this is a rare cash flow, and through reinvestment, we can collect as many high-quality corporate equity as possible.
Second, the selection of investment objects. At present, my investment is mainly concentrated in insurance and banking stocks. I only choose Ping An of China for insurance. China Merchants Bank is currently a heavyweight in banking stocks, and I also hold a small part of China Construction Bank. My personal investment strategy is the comparison method, that is, choosing the best among the best, choosing investment targets with better certainty and holding them for a long time. As for the reasons for choosing bank stocks, I have previously published an article to discuss the reasons, and I will not repeat them today. Interested friends go to the historical articles. Compared with insurance stocks, individuals prefer to choose bank stocks. Although he has held a heavy position and held Ping An for a period of time, his personal research is still not enough, especially the certainty of his future. For bank stocks, there are a lot of options at present, especially in the current generally undervalued market, they all have good growth potential in the future. This is closely related to personal investment style, I prefer a bank with balanced dividend and growth. Some stockholders said that compared with China Merchants Bank, they are more optimistic about Industrial Bank and Ping An Bank in the future. This is no problem, the key is to suit yourself. I just read the PE of China Merchants Bank, the current dynamic price-earnings ratio is only 6.95, the static price-earnings ratio is 8.35, and the price-to-book ratio is 1.31. Compared with the price-to-book ratio, I personally like to use PE for valuation. For China Merchants Bank, personal opinion, a reasonable valuation PE is around 12-13. Therefore, the current price is obviously undervalued. Therefore, I will be below 40, and I will not hesitate to increase the position if I have money.
Finally, I bought China Merchants Bank at a price of 39.55 using China Ping An dividends in the morning. Although the price was a little higher than the previous purchase of 38 yuan, it did not affect my operation at all. Compared with missing the opportunity to increase positions by 40, this cost is acceptable.
The above are just personal opinions and should not be used as investment advice! Special reminder: Any investment operation requires you to think and make decisions independently, otherwise you will be responsible for the consequences!
$China Merchants Bank(SH600036)$
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