Reits have ex-dividend just recently. And interestingly at today prices, the dividend gap has mostly closed. What ! Since when they becomes a gem... well not exactly like those miraculous speculative counters that spiked more than 20% in a day but if we are to track the trend across multi-years, Reits are like turtle but they will reach and beyond.
A few examples on just this year returns for me will be Ascendas Reit closes $2.95 (Xirr 27%), CapitaMall Trust $2.44 (Xirr 11%) and Mapletree Ind Tr $2.10 (Xirr 10%). Instead of going lower, many Reits have went up in this Trade War.
Quote from Warren Buffett :
“Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the ‘hamburgers’ they will soon be buying."
“This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.”
This is easily applied to Stable Return Equities. Investing in Strong Reits are simple. DPU and Growth. If the price go lower, is cheaper ! This is so true for investment that has stable returns. Problem is too many people has "master the art". Reits are at ever lowering yield. Does that mean is no good ? Maybe is just the Hat you want to wear. All in the mind.
Cory
2019-0525
Volatility
The picture has changed so much for STI. Banks were hammered down. In addition to the Trade War the new concern is the virtual bank licensing. The Reits / Trusts generally do much better that even the weaker ones make the Banks look bad.
I did a bottom fishing on STI ETF to support the gap in performance between the ETF and me. However, it seems STI ETF still has some distance to go further down as the next tariffs of US$300 B is going to be major. Companies should be making preparation for this as this could hit China manufacturing with more substance whereas previously maybe just on finishing touch of products.
I think War Chest is more essential today than few days ago as the market trend seems getting a little nervous. While I hold the view that stable Reits are like "Fixed Deposits", this is based on the opinion that DPU remains stable and Investor ignore Capital Gain/Loss. So any significant market changes, if any, to hit this class of asset, this may even present good opportunity for the fund to expand. Question is how deep ?
Feeling bored and thinking.
Cory
2019-0523
Last previous blog here.
The key change after 3.5 months are my Net Property Asset. Definition is the value of my property minus outstanding loan. This is then added to my Net Worth. The way to obtain value of my property is to access URA website for recent transacted values in $psf. And then do a conservative estimate of what my property value be if I have to sell it today.
Other changes includes increase in Singapore Saving Bond holdings (SSB) and increase in equity valuation due to capital gains. Both % figures hold well but SSB still reduces slightly in % wise. More cash today in my investment account and the unrealised gains from stocks outweighs the net sales. Dividends are straight into cash.
Despite that, saving reduced in % wise. Mainly because I have just paid my tax. Proportionate decrease due to significant increase in property net value. Slightly higher spending due to new cost for nanny.
Cheers
Cory
2019-0519
