The ride on Chinese stocks have not been going well. It could have been worst considering the downtrend is as deep as Year 2008 global financial crisis except that this is man-made. Frankly, for such a deep correction, the cost to economic is highly subjective bother concern. Even with past few days of rebound, the downtrend is still intact from what I estimate from the chart. Some of the change is anti-capitalism in nature. This may mean innovation will be much harder locally.
In contrast to Chinese stocks, the US market is on strong recovery mode. Printing continues to work. There is no runaway inflation so far. Whatever loosening of the dollar means the value get lesser which implied the stock price should go higher as the fundamental of the business remains unchanged if not better since those with strong moat will adjust their product and services upwards.
In my view higher inflation even though may result in higher interests rate being driven, the benefits resulting of it is increase in rental due to rising business cost. This is good for reits as many of good quality reits yield are in sub 5% range and therefore quite compressed currently. There is little room for capital gains consider the baseline rate such as CPF 4% and SSB 1.5% could be use as reference of near zero risk.
In this Pie chart view, Banking continues to be under represented. It will be good to have slightly higher allocation so that relatively performance wise will not be too far off from STI Index. Reits 40% allocation is in sweet spot. Growth stocks at 9.8% looks ok for now. Mid Term would target 15% to achieve a balance on growth and dividend yields. Frasers Corporate bond will be maturing next year. Will be excited to have them deploy elsewhere to support growth and dividend as needed.
Investment fund is down to 1.7%. Planning to inject new funds to boost the portfolio later as a number of stocks are in quite attractive valuation. Profit yield YTD is 6.9%. There is good chance the portfolio will improve on current returns.
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Cory, my sincere view is that your REIT holding may be too large. Especially in a structural change facing office, hospitality and retail reits, in degree of impact.ReplyDelete
As loan renewals kick in in next 3 years, the average i/r will rise, creating a double whammy.
Think i need to display by reits segments. Industrial reits are significant in it. Elite is rent to gov. FCT is suburb malls which more robust. The only pure office is iReit in EU. Only MCT in SG which has mix of Business park and Viva mall. They are much smaller if we exclude Industrials and Elite.Delete