7.5k to invest in REITS

[FreshFunds]

Hey all, I have been reading about REITS for the last few months and have decided to venture into this with my limited capital.

Currently the strategy that I have in mind is to buy-and-hold as I will not be actively trading for the next 2 years as I have other life goals. Thus at the moment I'm looking at those with high dividend yields such as First Reit and AIMS APAC Reit.

Some questions that popped up in my head:

1) Do I diversify into various reits with this limited capital or focus on just one type of reit until I'm able to accumulate more capital in the future for higher diversification power?

2) I've read up on cases where their initial strategy was to buy-and-hold simply just to reap the dividends, but changed their minds when the paper gain/loss is too huge and proceeded to buy/sell to cut loss/gain profits. Do I still look at other factors such as DPU/price to book/property yield/property yield unless i am not bothered by the growth prospect of the reits? My long term investment objective is to simply build up my passive income and not time the market (unless i can do both expertly like Dividend Warriors lol)

3) How will first-tier reits such as Ascendas and CMT affect my long term investment goals (solely to build up passive income)? Their share prices are higher, better growth prospects, higher DPU etc but lower dividend yields compared to First Reit for eg.

Thanks so much in advance REITS experts!

 

[Yorixz]

The decision boils down to your risk appetite. How much of your 7.5k can you afford to lose? If you are risk adverse, buying savings bonds is the perfect way to go. Since you have decided to invest in reits, that means you are able to stomach at least low risk. Getting 7 lots of lion phillip s reit etf would be a good way for initial exposure to a well diversified basket of reits of capitaland, ascendas, Mapletree etc. If you have high savings rate, you can plough 7.5k into 2500 shares of ascendas reit and then average up or down every month when you have new funds.

 

[unclebutcher]

Push it up to 10k and go for stashaway SGD portfolio. No need to think

 

[CaptainTeo]

Push it up to 10k and go for stashaway SGD portfolio. No need to think

What is this

 

[commie_rick]

Push it up to 10k and go for stashaway SGD portfolio. No need to think

What is this

im keen to find out too

 

[MikeDirnt78]

Just buy Nikko AM Straits Trading REIT through POSB Invest Saver.

You give up some yield for better diversification and lower risks.

Those reits that you mentioned are more volatile.

 

[alibaba136]

GOOD ONE.....

 

[simon_84]

i have first reit though, if you are worried about its parent company.
well just get a small amount will do.

reits are not really for buy and hold strategy if there is a bubble, don't chase the bubble.

the best time to buy reit is when nobody is talking about them, during that time price are low and everyone find reits boring.
when you tell ppl you bought a reit, they laugh at you.

 

[Angry Bird]

hmm, reit good to buy? now is at very high price, and lots of shares placement, rights cash calling.

usa/hk shopping malls crashing down, wework shrinking, industrial space over supply,
world trade slowing down, most PMI below 50, singapore just recorded -12.3% nodx down.
people talking about deutsche bank to trigger another GFC, overnight rate repo at usa-fed needs daily blood transfusion
=> all news are bad, only good news is money printing.

for me i prefer to, and now mainly in cash+gold position. only quick trading on some heavily whacked down shares to sooth my itchy fingers.

reit price could still go up if usa-fed continue to cut rate and qe. there is already euro$20bil/month open end qe by ecb, and us$60bil/month qe by usa-fed until 2020Q2 (and i bet usa-fed will make it open end in 2020Q2). there is no end of money printing in sight, and getting bigger amount forward. too much money chasing too little assets and yield, TINA effects.

i do not think there is any "should or should not" buy some reit now, it could like buying negative yield bonds and waiting for someone buying at higher px from you. at least reit's yield still quite attractive in general.

need a lot of luck in this market, keep in cash for next many years also would die... i would say: may be if want to buy reit now then better buy those very very stable ones, and don't be greedy for another 2-3% dividends. Priority is to protect your capital now. Don't lose your capital!

 

[NewInvestor]

hmm, reit good to buy? now is at very high price, and lots of shares placement, rights cash calling.

usa/hk shopping malls crashing down, wework shrinking, industrial space over supply,
world trade slowing down, most PMI below 50, singapore just recorded -12.3% nodx down.
people talking about deutsche bank to trigger another GFC, overnight rate repo at usa-fed needs daily blood transfusion
=> all news are bad, only good news is money printing.

for me i prefer to, and now mainly in cash+gold position. only quick trading on some heavily whacked down shares to sooth my itchy fingers.

reit price could still go up if usa-fed continue to cut rate and qe. there is already euro$20bil/month open end qe by ecb, and us$60bil/month qe by usa-fed until 2020Q2 (and i bet usa-fed will make it open end in 2020Q2). there is no end of money printing in sight, and getting bigger amount forward. too much money chasing too little assets and yield, TINA effects.

i do not think there is any "should or should not" buy some reit now, it could like buying negative yield bonds and waiting for someone buying at higher px from you. at least reit's yield still quite attractive in general.

need a lot of luck in this market, keep in cash for next many years also would die... i would say: may be if want to buy reit now then better buy those very very stable ones, and don't be greedy for another 2-3% dividends. Priority is to protect your capital now. Don't lose your capital!

This is a very realistic view. Thumbs up!

 

[unclebutcher]

im keen to find out too

ETFs: Straits Times Index, SG Government Bonds, SGD Investment Grade Corp bonds, Asia high yield corporate bonds, S-REIT, Asia ex-Japan REIT.

Basically medium risk basket of ETF. No single exposure to one single reit that can tank (e.g first REIT circa 2018, eagle Htrust 2019)

Downside is 0.8% management fee which is $80 per yr, but can get 6 months free management fee For $10k

Personally I'm using this with my CPF SRS funds. Buy and forget. No need to think. Use cash for capital gain stock investing

Can use my code if u wish

https://www.stashaway.sg/referrals/chanzmn4n

 

[NewInvestor]

ETFs: Straits Times Index, SG Government Bonds, SGD Investment Grade Corp bonds, Asia high yield corporate bonds, S-REIT, Asia ex-Japan REIT.

Basically medium risk basket of ETF. No single exposure to one single reit that can tank (e.g first REIT circa 2018, eagle Htrust 2019)

Downside is 0.8% management fee which is $80 per yr, but can get 6 months free management fee For $10k

Personally I'm using this with my CPF SRS funds. Buy and forget. No need to think. Use cash for capital gain stock investing

Can use my code if u wish

https://www.stashaway.sg/referrals/chanzmn4n

Is the yield better than the cpf 2.5%?

 

[commie_rick]

ETFs: Straits Times Index, SG Government Bonds, SGD Investment Grade Corp bonds, Asia high yield corporate bonds, S-REIT, Asia ex-Japan REIT.

Basically medium risk basket of ETF. No single exposure to one single reit that can tank (e.g first REIT circa 2018, eagle Htrust 2019)

Downside is 0.8% management fee which is $80 per yr, but can get 6 months free management fee For $10k

Personally I'm using this with my CPF SRS funds. Buy and forget. No need to think. Use cash for capital gain stock investing

Can use my code if u wish

https://www.stashaway.sg/referrals/chanzmn4n

im considering bonds or bonds etf thus i created this thread

https://forums.hardwarezone.com.sg/...92/face-value-bond-6151725.html#post123804925

 

[unclebutcher]

Is the yield better than the cpf 2.5%?

Apparently 3.8%. but of course got risk of capital loss

 

[MikeDirnt78]

im considering bonds or bonds etf thus i created this thread

https://forums.hardwarezone.com.sg/...92/face-value-bond-6151725.html#post123804925

Just go with bonds ETF.

 

[lightchaser]

which bond etf is reasonably good ?

 

[FreshFunds]

The decision boils down to your risk appetite. How much of your 7.5k can you afford to lose? If you are risk adverse, buying savings bonds is the perfect way to go. Since you have decided to invest in reits, that means you are able to stomach at least low risk. Getting 7 lots of lion phillip s reit etf would be a good way for initial exposure to a well diversified basket of reits of capitaland, ascendas, Mapletree etc. If you have high savings rate, you can plough 7.5k into 2500 shares of ascendas reit and then average up or down every month when you have new funds.

my principle before investing is to always be able to afford losing whatever that u have invested in while understanding the risks involved, thus I was able to come up with the figure of 7.5k and I would say my risk level is between low to medium.

unfortunately my savings rate is very limited for now as I have lots of liabilities thus I'm planning to do a buy-and-hold for the next 2 years until I accumulate more capital before the next reits purchase.

Just buy Nikko AM Straits Trading REIT through POSB Invest Saver.

You give up some yield for better diversification and lower risks.

Those reits that you mentioned are more volatile.

I understand the benefits/importance of diversification but i don't have much capital to play around with for now. For short term wise (the next 2 years), would it be wise to just buy 7 lots of first reits (8.43% div yield) VS 3 lots of mapletree ind trust (4.88% div yield)?

in terms of volatility, if i can stomach the paper loss (if any) for the next 2 years and not panic sell, should be no issues right? i don't wanna have sleepless nights checking share prices everyday lol. so far the worst case i read was sabana reits.....

and also I currently pump in 200/mth into STI ETF if that helps in diversification.

i have first reit though, if you are worried about its parent company.
well just get a small amount will do.

reits are not really for buy and hold strategy if there is a bubble, don't chase the bubble.

the best time to buy reit is when nobody is talking about them, during that time price are low and everyone find reits boring.
when you tell ppl you bought a reit, they laugh at you.

good point. i see people are now pessimistic in buying reits cos the share prices are way too high compared to few years back? what makes u decide on buying first reits? is first reits the main % of your portfolio?

hmm, reit good to buy? now is at very high price, and lots of shares placement, rights cash calling.

usa/hk shopping malls crashing down, wework shrinking, industrial space over supply,
world trade slowing down, most PMI below 50, singapore just recorded -12.3% nodx down.
people talking about deutsche bank to trigger another GFC, overnight rate repo at usa-fed needs daily blood transfusion
=> all news are bad, only good news is money printing.

for me i prefer to, and now mainly in cash+gold position. only quick trading on some heavily whacked down shares to sooth my itchy fingers.

reit price could still go up if usa-fed continue to cut rate and qe. there is already euro$20bil/month open end qe by ecb, and us$60bil/month qe by usa-fed until 2020Q2 (and i bet usa-fed will make it open end in 2020Q2). there is no end of money printing in sight, and getting bigger amount forward. too much money chasing too little assets and yield, TINA effects.

i do not think there is any "should or should not" buy some reit now, it could like buying negative yield bonds and waiting for someone buying at higher px from you. at least reit's yield still quite attractive in general.

need a lot of luck in this market, keep in cash for next many years also would die... i would say: may be if want to buy reit now then better buy those very very stable ones, and don't be greedy for another 2-3% dividends. Priority is to protect your capital now. Don't lose your capital!

thanks for the insight altho i might not fully understand all the jargons u mentioned, gotta do more reading!

the very very stable ones don't really fit my risk appetite altho they can safeguard my capital. and since i won't be actively trading for the next couple of years, i think no harm in going for the higher yielding reits for now. there are also other factors i considered such as price-to-book ratio, DPU, NAV, property yield %, gearing ratio so i think it wasn't a decision solely based on greed. maybe i can venture into the stable ones 2 years later when i might do active trading?

 

[FreshFunds]

ETFs: Straits Times Index, SG Government Bonds, SGD Investment Grade Corp bonds, Asia high yield corporate bonds, S-REIT, Asia ex-Japan REIT.

Basically medium risk basket of ETF. No single exposure to one single reit that can tank (e.g first REIT circa 2018, eagle Htrust 2019)

Downside is 0.8% management fee which is $80 per yr, but can get 6 months free management fee For $10k

Personally I'm using this with my CPF SRS funds. Buy and forget. No need to think. Use cash for capital gain stock investing

Can use my code if u wish

interesting. went to the website to read up about it. currently I have STI ETF of 200/mth since Jun-19 as I didn't have much capital back then. maybe I will venture into this when I accumulate more capital in the future for diversification/capital preservation.

 

[MikeDirnt78]

which bond etf is reasonably good ?

https://www.nikkoam.com.sg/etf/sgd-investment-grade-corp-bond

This is the best for a local exposure.

Good thing is you can do a regular savings plan on it.

 

[MikeDirnt78]

interesting. went to the website to read up about it. currently I have STI ETF of 200/mth since Jun-19 as I didn't have much capital back then. maybe I will venture into this when I accumulate more capital in the future for diversification/capital preservation.

If I were you, I will just up the STI ETF amount and setup another RSP using the $7.5k money. Stop the RSP once $7.5k fully utilised.

You wouldn't want to buy lump sum and end up buying at a peak price.

Start slowly but surely safe.