General S-REITs Discussion Thread

[revhappy]

Another thing about REITs, they are active investments, which means you need to do lots of research, but unlike stocks, REITs cannot give you like 10 bagger or 100 bagger like stocks can give you. At best REITs can give you bond like returns.

However, worst case scenario, REITs because they are leveraged investments can really crash like some of the US REITs.

So, what sort of investment is this where the upside is limited but downside is unlimited. @Dividends Warrior @homer123 what are your thoughts on this? Has something fundamentally changed about REITS or were they always like this?

 

[DevilPlate]

Another thing about REITs, they are active investments, which means you need to do lots of research, but unlike stocks, REITs cannot give you like 10 bagger or 100 bagger like stocks can give you. At best REITs can give you bond like returns.

However, worst case scenario, REITs because they are leveraged investments can really crash like some of the US REITs.

So, what sort of investment is this where the upside is limited but downside is unlimited. @Dividends Warrior @homer123 what are your thoughts on this? Has something fundamentally changed about REITS or were they always like this?

In SG context, Bluechips reits yield is around 2.5% above risk free 10y SGS.
Both CFA/CLR offering close to 6% (no need stockpick)

Bonds also limited upside and unlimited downside (zero)
Based on yr reasoning, everybody js whack global etf lor.

 

[stanlawj]

In SG context, Bluechips reits yield is around 2.5% above risk free 10y SGS.
Both CFA/CLR offering close to 6% (no need stockpick)

Bonds also limited upside and unlimited downside (zero)
Based on yr reasoning, everybody js whack global etf lor.

Both CFA/CLR are down by 20% since 2019.
2019 to 2024 = 5 years.
5 years of capital loss.

Dividend yield over those five years is not enough to cover capital loss. Also with inflation that took place from 2019 to 2023 means that buy in 2019 and value at 2024 current price will result in "loss" of at least 20%.

 

[stanlawj]

Another thing about REITs, they are active investments, which means you need to do lots of research, but unlike stocks, REITs cannot give you like 10 bagger or 100 bagger like stocks can give you. At best REITs can give you bond like returns.

However, worst case scenario, REITs because they are leveraged investments can really crash like some of the US REITs.

So, what sort of investment is this where the upside is limited but downside is unlimited. @Dividends Warrior @homer123 what are your thoughts on this? Has something fundamentally changed about REITS or were they always like this?

All property can turn to lemons. Even if you buy a private property, there can be hidden issues, if you don't due the due diligence yourself. Water damage, leaks above you, tenant from hell, maintenance work on shared property (for old condo), new building construction blocking view in the future (see Sky Habitat) etc.

What you are not sure about is the due diligence process. For REITS, one needs to know the stability of the tenants, interest rate policies, management, and not too forget, the stock market psychology!

 

[waxqube]

Another thing about REITs, they are active investments, which means you need to do lots of research, but unlike stocks, REITs cannot give you like 10 bagger or 100 bagger like stocks can give you. At best REITs can give you bond like returns.

However, worst case scenario, REITs because they are leveraged investments can really crash like some of the US REITs.

So, what sort of investment is this where the upside is limited but downside is unlimited. @Dividends Warrior @homer123 what are your thoughts on this? Has something fundamentally changed about REITS or were they always like this?

Cannot agree with most of your points. First, REITs are not comparable to bonds. Bonds generally do not guard against inflation. As for the outsized returns, are you able to pick a 10 or 100 bagger on average? Based on US market, REITs have consistently outperformed S&P500 in the past. Of course, we can't say the same for the future. Second, if we're talking about leverage, then you'll have to include a lot of stocks as well, especially banks. Third, I cannot agree with your definition of downside risk. There is no unlimited downside risk unless you're shorting, because at most your investment goes to zero. That is the same for stocks as well.

 

[stanlawj]

There is no unlimited downside risk unless you're shorting, because at most your investment goes to zero. That is the same for stocks as well.

Yup, downside risk is basically all the capital invested.

 

[DevilPlate]

Aiya buy VWRA wun wun jiak beehon lor whahaha

 

[d5dude]

In SG context, Bluechips reits yield is around 2.5% above risk free 10y SGS.
Both CFA/CLR offering close to 6% (no need stockpick)

Bonds also limited upside and unlimited downside (zero)
Based on yr reasoning, everybody js whack global etf lor.

Reits yield is not a guaranteed yield, DPU can go down and payouts can get cut, this is not theoretical, this has actually happened before. Of course the flipside is that DPU can also go up, dividend payouts can increase and the share price can thus go up. I think utilities (stocks) is the closest analogy to reits, in terms of volatility and performance.

Bonds (corp) are senior on the capital structure, downside is rarely -100% unless you bought AT1s or some junk bond, gov bonds are 100% capital guaranteed and the future return is 100% fixed and known from the day of purchase. They are totally different from reits or even a reit etf.

 

[DevilPlate]

Reits yield is not a guaranteed yield, DPU can go down and payouts can get cut, this is not theoretical, this has actually happened before. Of course the flipside is that DPU can also go up, dividend payouts can increase and the share price can thus go up. I think utilities (stocks) is the closest analogy to reits, in terms of volatility and performance.

Bonds (corp) are senior on the capital structure, downside is rarely -100% unless you bought AT1s or some junk bond, gov bonds are 100% capital guaranteed and the future return is 100% fixed and known from the day of purchase. They are totally different from reits or even a reit etf.

All these i guess everyone here knows liao.
so whats yr whole point?

 

[d5dude]

All these i guess everyone here knows liao.
so whats yr whole point?

My points are different from yours is the whole point.

 

[DevilPlate]

My points are different from yours is the whole point.

I don’t think it is different leh. All these very basic stuff….different type of bonds and my guess most peeps here also know dividend can go up or down or even halt. Reits can go bankrupt also which have happened to many cui scammy foreign reits listed here LoL

thats why i highlight 2.5% yield above 10y risk free SGS….else who wants to buy reits?
Js like corp bonds must yield higher then 10y SGS but less than reits tio bor?

So again, whats yr point sia? Is S-reits worth considering anot?
is current 2.5% enough for the underlying risk?

is it suitable for retirees? Which profile can consider owning some reits? How much allocation?
or everyone regardless of ages and life stages js whack VWRA?

 

[DevilPlate]

Here got strong followers of Shiny.
Typical answer would be skip Reits and js focus on 60/40 portfolio and adjust it as one closer to retirement. Whahaha

MBH+ VWRA combo

 

[d5dude]

I don’t think it is different leh. All these very basic stuff….different type of bonds and my guess most peeps here also know dividend can go up or down or even halt. Reits can go bankrupt also which have happened to many cui scammy foreign reits listed here LoL

thats why i highlight 2.5% yield above 10y risk free SGS….else who wants to buy reits?
Js like corp bonds must yield higher then 10y SGS but less than reits tio bor?

So again, whats yr point sia? Is S-reits worth considering anot?
is current 2.5% enough for the underlying risk?

is it suitable for retirees? Which profile can consider owning some reits? How much allocation?
or everyone regardless of ages and life stages js whack VWRA?

My point is reits are not even remotely comparable to gov bonds so even compare reits to the 10yr? The yield is not fixed like the 10 yr, neither is the capital guaranteed.

Reits are not fixed income like the 10 yr SGS, they are equities and they require a certain amount of work (due diligence), so its pretty pointless to look at the div yield, just like its pointless to compare the div yield of any stock to the 10 yr. Many REITs will acquire new properties and they have frequent cash calls (which basically takes back the distributed dividend), so its more important to look at the total return rather than the div yield (just like it is for any other stock).

Also I dunno much about CFA/CLR or its composition, but its such a narrow segment of the stock market, I doubt this ETF removes the need for DD or active management.

 

[DevilPlate]

My point is reits are not even remotely comparable to gov bonds so even compare reits to the 10yr? The yield is not fixed like the 10 yr, neither is the capital guaranteed.

Reits are not fixed income like the 10 yr SGS, they are equities and they require a certain amount of work (due diligence), so its pretty pointless to look at the div yield, just like its pointless to compare the div yield of any stock to the 10 yr. Many REITs will acquire new properties and they have frequent cash calls (which basically takes back the distributed dividend), so its more important to look at the total return rather than the div yield (just like it is for any other stock).

Also I dunno much about CFA/CLR or its composition, but its such a narrow segment of the stock market, I doubt this ETF removes the need for DD or active management.

My point is to highlight the nuances Revhappy has made. He said reits provide bonds like returns at best.
If reits provides similar returns as SGS bonds…..i will skip reits altogether and buy 5/10 y SGS bonds.

 

[d5dude]

My point is to highlight the nuances Revhappy has made. He said reits provide bonds like returns at best.
If reits provides similar returns as SGS bonds…..i will skip reits altogether and buy 5/10 y SGS bonds.

That I dun agree, they are stocks so you get equity-like returns/risk, but he is right about the active management part. REITs (as in single stocks) require active management, REIT ETFs are sector ETFs so there is very little diversification and thus require some level of active management as well.

 

[DevilPlate]

That I dun agree, they are stocks so you get equity-like returns/risk, but he is right about the active management part. REITs (as in single stocks) require active management, REIT ETFs are sector ETFs so there is very little diversification and thus require some level of active management as well.

Yap u r right.
passive investors js whack VWRA….wun wun jiak beehon

 

[limster]

Yap u r right.
passive investors js whack VWRA….wun wun jiak beehon

can also whack some VHYD for more dividends

with tonight's news of hotter than expected inflation, I suppose REITs will get hit again tomorrow. I'll set a $1.05 TP to buy more FLCT.

 

[ctan84]

can also whack some VHYD for more dividends

with tonight's news of hotter than expected inflation, I suppose REITs will get hit again tomorrow. I'll set a $1.05 TP to buy more FLCT.

I lowball u a bit, I will wait at 1.02 and under.

 

[TehSi99]

I lowball u a bit, I will wait at 1.02 and under.

I aiming MLT.

 

[DevilPlate]

Both CFA/CLR are down by 20% since 2019.
2019 to 2024 = 5 years.
5 years of capital loss.

Dividend yield over those five years is not enough to cover capital loss. Also with inflation that took place from 2019 to 2023 means that buy in 2019 and value at 2024 current price will result in "loss" of at least 20%.

ya lor whereas condos/Landed in general up by 30-40% during the same period.

still remember last time many argue w me say dont waste time on condos, buy reits better because it is passive (no need to handle tenants and maintain property) and no need to take up mortgage loan.

There is no free lunch afterall.

*mai flame me by saying vwra etf better hor whahahaha