Cory Diary : Reits 2014

Despite my preference for "fixed income" and being a "landlord", the leverage mechanism of Reits and Management have been trying this days. Facts - Reits are mainly in downtrend and is hitting home with starts of QE. Interest Rates are not even in the picture yet. Things will be tough this year as well if the strong ones are also doing fund raising.

There are still few gems out there but is not a guaranteed profitability net-net. Meaning after Rights, Placements, Dividends and Market Value, are we better off is a big question mark.

Managers are securing funding to lower their gearing. Meaning no additional returns from the funding exercise. Isn't this much worst than investing in a lower yield property than current DPU ? Not sure i should classify it as one of ultimate worst sins.

The Property Market has hit the ceiling. We should be expecting book value hitting north but the market pricing seems ahead on that giving us a value proposition that is actually sliding with lower price and value.

I still view Reit a key segment in my portfolio but there is also a time for everything. At the mean time, do look at the trend chart and draw your own conclusion.

Happy Reit'ing !

Cory
19th Feb 2014

Cory Diary : Part 2 on Base Lining

I just read a thread and decided to think aloud.

Here's the background.

Someone bought Sabana and now sitting at a loss. Advisor came and said this.

If you have buy at a low last year around 90. Is ok to hold on. However those who buy at high, meaning lately, chance of return is remote.

Saying it another way.

Since you have capital gain when you enter at 90, is ok to lose those gains. Those who got recently be prepared for further loss if continue to hold.

Hello ? Hello !!

To hold or not should not have dependency on price entered at different times.
This is why I need to base line my portfolio to avoid falling into the feel "rich" gap.

Cory

8th Feb 2014

Cory Diary : Base Lining my Stock Investments

What do i mean by that ?

The goal of investment is to be able to generate more and more cash. We do not want to go up and down equally or similarly. In the long run, is useless and time wasted. And worst, loses all your capital.

In summary, base lining my profits/losses is resetting my Capital in a regular manner. A fresh start and perspective into my portfolio. And re-evaluating all my holdings.

For example I have 100K capital. Earned 30K by the end of year. In the new year, I have 130K capital. Zero out my profits/losses in every counters. Doing so i am basically treating 130K as my own money from my "saving" account as though is a fresh fund. I do this annually.

Upon doing that, I am resetting my stock initial investment cost to the price of the new year in a new page. And then i re-start to re-evaluate my holdings at this cost level which then kickoff a re-balancing of my portfolio.

This put my thought into a more balance approach with no baggage. To know whether we have execute this mental method successfully, you would have forgotten your initial buy price of prior years like me do.

Ok ! You can call me absent minded. :P


Cory
1st Feb 2014