Wednesday, March 26, 2008

Appreciation





How to appreciate your wealth in share market? It is not gambling but investing. I summarize the example of this counter, PBBANK listed in Kuala Lumpur Stock Exchange. It hits the lowest record price of 0.85 on 17th, August 1998. We don’t count from that moment. We count from the 2nd, January 2001. It is the first trading day of 2001. That time if you buy 1000 share at price RM2.90 with par value of RM0.50, you need to invest about RM2,900.

After that look at the entitlement announce from year 2001 to year 2007 by the company. There is a table above of the announcement. From here, can see total dividend you get is RM2129.19. It is already near to the starting capital you invest. Besides, look at the price on the last trading day of 2007, 31st, December 2007. The price is close at RM11.00. If you sell all your share (1015 share) of this company, you get back RM11,165.00.

Sum up all together the money you get back from the sale of the share and the dividend you get, it is total you get back RM13,294.19.

From seed capital of RM2,900 become RM13,294.19 is 458.42% increment. It is about 25% increase of the seed capital each year. This is the reward or fruits you get from the basic fundamental investment. This is why rich people invest their money rather than put their money in bank account.

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