Is also true as well that when there is broad market draw down, chances are both Index and Individual stock pickers may suffer as well. One way to counter such situation in total return perspective is have bonds. Treasury specifically if one want to eliminate company risks. And for US, forex risk. In bad time there is chance the currency will strengthen with high yield and in good time vice verse. All this is probability imo.
In local context, T-Bills and SSB are good enough instrument to negate forex risk and capital loss. However, there aren't capital gain to talk about. So this can't hedge against Banks drawdown in crisis or recession situation. Ofcourse afaik.
Since my portfolio are mainly stock picks, I am the character type that want to beat against ETF if not to learn through the process and do better in next iteration. In this situation as in I do not have much lead way in term of early investing to compound, hindsight on America Economy, limited ammo vs expenses and risk tolerance.
This come back to talk through about my current portfolio again. Banks allocation increased steadily over the years to hedge against rate spikes when the portfolio is predominatly Reits. To hedge it successfully the Bank allocation increased significantly vs the Reit allocation. And then late build up into US market with smaller size for earning exposure diversification. In current context, why I am still heavily in Reits is the believe that the contract cycle will soon be over, and rental renewal catching up with the rate spike that tattered the Reit market so badly. Whether the rate stays high is not in the equation. Meaning Reits that cannot do well in this environment I will not be interested as much.
This equation left out forex risk and so foreign reits suffered significantly from high market rate impact and recessive local economy. Reason why this segment within the Reit sector should be scaled down to reflect their added risk despite their high dpu that time. Even reit such as Elite UK Reit with such a robust tenant (gov) get impacted severly. The strong S$ put their return further out. iReit situation is not as good imo and may take long time to recover. They won't suffer as much as US office Reits but is a low bar of comparison.
So how did Mapletree Ind Reit managed to overcome this odds ? For one they managed to seek out DCs in Japan with much lower Interest rates quickly. Will there be side effects, time will tell. They also have little or no exposure to EU whereas Ascendas does. In my perspective, I have been reducing my exposure to Ascendas due to low occupancy rate trend. They have not ben addessing the issue well despite stable dpu.
Interestingly there are Indistrial Reits like Aims Apac Reit despite their small size are doing much better than much larget Reits. They do put quite an amount of work to uplife their properties and this is despite large exposure in Australia which also see weaken currency earning. In what they suffer, i feel they make it up with having long term strong tenants. Nevertheless, investing in this Reit has to be scaled appropriate unfortunately.
A large reit in mind is Ascott Trust whom recovering from Covid period. The tourism market has also been coming back so it may takes some time to play out. There is volatilty in the reit so far and I am not completely sure on their earning power and dpu sustainability. It is worth some diversification so far.
FCT comes in a a key holding on income and stability perspective. They manage local suburb malls and is one that give me a lot calm to my investing. It has grown quite large hence there is some CICT now. It is an essential locally. While there are HDBs Coffeeshops and JB provides competition, they aren't the same but to provide sufficient value checks.
There are two non-reit non-bank local stocks in the portfolio. Netlink BNB Trust and Sheng Siong. Let me get Sheng Shiong quickly out of the way by saying I just sold off all to re-balance. A counter that has profted well for many years. I decided to finally let it go when the yield hits 4%, China exposure not walk in the park and recession hedge not needed since I have fixed instruments to cover.
Net link bnb Trust always have the sustainability of their dividend in mind. As many may know, they have been increasing their loan but it may take a long time to hit the wall. Probably well over the next fee review. During this time, I hope to see what growth engine or so to speak increase in return they can manage. Is still in monitoring stage.
Finally, the US Market has been on peanut butter spread to capture growth. There is some hit and miss trying to optimise return. This is something I am still working on. Recent Deepseek does have impact on Nvidia, TSMC and ASML. But quite positive to Amazon and Goggle imo. There is also exploration in Treasury Bills to uplift fixed return and hedge against Singapore local investments.
That's all I have to say on my portfolio. Dyodd.
thanks
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