trading strategy : dividend play in a seems to be expensive market

US stocks fell on Thursday. This happens as US President Barack Obama proposed tough restrictions on banks that would squeeze profits. The Dow had its worst two-day percentage decline since June, while the Dow and S&P 500 had their worst one-day percentage losses since late October. So it is only natural that today KLCI follow suit in declining, so far drop 7 points. Volume traded seems pretty high too. this has reminded me of what the chartnexus instructor say last week: are we on the verge of a market correction again? Will the dow celebrate chinese new year this year round?

Anyhow, if one stick to high dividend counter, i think this might provide a small opportunity to go in. Let see an example on this. Last week as i was in KL, the latex glove counters are very hot. Supermax went to RM6. Analyst's report are all very bullish, and don't know how many investors will be prompted to go in at that time? As of today, supermax has dropped to RM5.18, that is 13% drop. I didn't go to that counter (actually before the super run up in price prior to last week, i did think to diversify to glove counter), as the price has run up too much, and MOST important dividend is low for those counters.

So, what is the dividend stock i'm looking at? for the last two days, OSK and S&P has covered Zhulian. Its current dividend yield of 7.7% is pretty attractive. The counter has little debt and high ROE of 27%. For consumer based counter (it is MLM company) which has been able to weather the last year crisis, i think there is little risk that its business will drop a lot. By going in now, at least we can expect a stable 7.7% dividend

Mean time, hai-o is RM8.59 now. if it reach RM8.3 or below again, perhaps i will go in a little. It is still great to get its bonus and share split (ex date not year annouced) with decent dividend yield of >5%.