Another season of dividend payments is coming. Personal Finance today selectively lists 36 dividend stocks that yield higher than 3.5 per cent, the average interest rate commercial banks offer for 3-month fixed-deposit accounts.

As the promised general election - one of foreign investors' major concerns - has yet to materialise and many people are afraid of what surprise measures may be taken during this interim government's term, analysts say it will be difficult to achieve capital gains from the stock market amid its current volatility.

They suggest that investors hold cash or invest only in stocks with good fundamentals when the price seems to be undervalued.

It may be a bit risky to jump into all or some of these stocks. As usual, the price of dividend-paying stocks always moves up when it's close to the execution date of the dividend payment. After the execution date, the value of these stocks usually drops. The value of some stocks declines a little bit, but some plunge so hard that the cost of the loss is greater than the dividend you get.

The price-to-equity ratio of Thai stocks is 8-9, lower than on many stock markets in the region.

If you are a long-term investor who believes that the value of good fundamental stocks will rise over time, investing now is a good idea; but you need to pick the stocks carefully. Also you need to scrutinise the companies you invest in every once in a while and estimate whether or not you are still receiving the dividends you are getting today.

The yield of some stocks may seem attractive, but you need to see the liquidity and market prospects of those stocks as well. If you want to receive the dividend payment but don't want to buy and hold, you need to do more homework.

If you can't afford to invest in many dividend-paying stocks and have no time to take care of them when they rise or fall, many asset-management firms offer equity funds that invests in dividend stocks. Some of these are long-term equity funds, retirement mutual funds and general stock dividend funds.

Some funds are invested only in dividend stocks while some are partly invested in such stocks. Also some funds promise to pay the dividend once a year while some will reinvest the dividend payment.

You don't need to have millions of baht in order to invest in many dividend stocks; you just need to read through the prospectus in order to search for the fund that suits your needs.

Siriporn Chanjindamanee

Piyarat Setthasiriphaiboon

The Nation