Hi Guys, morning! Its me again with some question on REITs...
https://ig.ft.com/sites/when-rates-rise/#in-depth-analysis
Saw this article about Federal Interest Rates projection... what if IR really increase to 3% by 2018? How much do you guys think that will impact on DPU and prices of REITs? The recent sell off in REITs is to price in the upcoming hike in Dec 2016, which should not be expected to be more than 75 basis points (from the current 0.25% - 0.5% to 0.875%?). I can't imagine how much will REITs fall when it eventually increases to 3%... or if it increase gradually enough, will the fall be more subtle?
The reason for asking is bcos I'm a long term investor who wishes to collect div over long time frame and not to worry so much about price erosion. Currently on my list are the 3 banking and 3 telco counters as I believe the 3 banks and Singtel is pretty resilience to price erosion and they provides pretty decent yield. And I think REITs will be more risky to hold long term that's why ppl like DW changed his investment style to include FIFO instead of hugging stocks for passive div?