Dividends, position sizing and stop-loss

This is lesson-collection #10 of Stock Knowledge 101, merging the former kb29–kb31 (3 mini-lessons). Read in order.

Dividends, yield & buybacks

This is Lesson 29/31 of Stock Knowledge 101 〔Dividends〕.

• Dividend yield = dividend per share / price, cash return; high-dividend stocks are often anchors.
• Payout ratio = dividend/net profit, how much profit returned to shareholders.
• Buyback: company repurchases its own stock, directly lifts per-share value; rising in A-shares.
• High yield ≠ blind buy: when price crashes yield looks inflated; confirm dividend is sustainable.

📌 Yield shows cash return, but first ask is the dividend sustainable; buyback is another form of reward.

Position sizing & staggered buying

This is Lesson 30/31 of Stock Knowledge 101 〔Position〕.

• Staggered buying: don’t go all-in; split 3~5 tranches at different prices/times to average down.
• Single-name cap: one stock ideally ≤10%~15% of portfolio to avoid one landmine sinking it.
• Pyramid adding: the lower it falls, the larger each tranche; inverted pyramid is most dangerous.
• Keep cash: always reserve 10%~30% for black swans and opportunities.

📌 Never fill the first tranche; position management keeps you alive more than maximising gains.

Stop-loss, take-profit & common pitfalls

This is Lesson 31/31 of Stock Knowledge 101 〔Risk〕.

• Stop loss: set in advance where you admit the call was wrong; execute mechanically (e.g., −8%~−10%).
• Take profit: when target reached, trim in batches (e.g., sell 1/3 at +30%); don’t ride the round-trip.
• Trap 1 chase rallies/sell panics: emotional trading is the enemy.
• Trap 2 confirmation bias; Trap 3 all-in with no cash buffer.

📌 Discipline > prediction: think ‘what if I’m wrong’ before ‘how much I’ll make if right’.

⚠️ This article is a methodological illustration and does not constitute any investment or trading advice. Markets are risky; decide with caution.