Saturday, December 27, 2008

capturing indian dividends

My Indian market CEF (closed end fund) IIF (from Morgan Stanley) has historically paid fairly high dividends. This summer they were quite impressive. The recent market turbulence has pushed IIF from very high prices ($56) to quite low (around $11.xx / share).

In early January dividends will be distributed. I wonder if profits for these companies have declined significantly or their stock price reflects market anxiety or future concerns about US market access.

If the profitability of component holdings did not decline, it's very possible the dividends will be a very large percentage of the share price. I've reinvested some dividends at the much lower price to increase my holdings.

If my finances proceed well - such as finding an new job - I'm likely to build up a larger investment in IIF out of surplus cash - assuming it's near the bottom - I feel guilty as I'm bottom chasing (sounds perverted) and sector weighting - which are contradictory to my investment philosophy, so I'll limit the overall investment, regardless, to something small.

I guess we'll find out what will happen by the second week of January.


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