[Official] REITs CD tracking thread

M

musicwhiz55

Member
Joined
Apr 26, 2009
Messages
258
Reaction score
1
So are people investing in REITs or speculating in REITs?

If you purchase a REIT for a headline yield of say 5%, a drop in share price would mean the yield gets more attractive. Therefore, the investor should be buying more as it would enhance his yield, ceteris paribus.

Obviously, this is a simplistic way of looking at REITs. There are many other factors to consider as well.
 
O

Opps-gal

Supremacy Member
Joined
Jun 14, 2007
Messages
8,275
Reaction score
987
musicwhiz55 said:
So are people investing in REITs or speculating in REITs?

If you purchase a REIT for a headline yield of say 5%, a drop in share price would mean the yield gets more attractive. Therefore, the investor should be buying more as it would enhance his yield, ceteris paribus.

Obviously, this is a simplistic way of looking at REITs. There are many other factors to consider as well.
Click to expand...

I like to see yield. I mostly holding for CDs and AGM buffet if any.
 
T

teerance85

Senior Member
Joined
Sep 23, 2011
Messages
1,512
Reaction score
1
musicwhiz55 said:
So are people investing in REITs or speculating in REITs?

If you purchase a REIT for a headline yield of say 5%, a drop in share price would mean the yield gets more attractive. Therefore, the investor should be buying more as it would enhance his yield, ceteris paribus.

Obviously, this is a simplistic way of looking at REITs. There are many other factors to consider as well.
Click to expand...

From the way i see it, i can see quite a fair bit is speculating in Reits. Everybody wanna pull out the plug early with fears of interest rates rising.

Am reshuffling my portfolio, so i can average down some of my Reits.
 
M

musicwhiz55

Member
Joined
Apr 26, 2009
Messages
258
Reaction score
1
teerance85 said:
From the way i see it, i can see quite a fair bit is speculating in Reits. Everybody wanna pull out the plug early with fears of interest rates rising.

Am reshuffling my portfolio, so i can average down some of my Reits.
Click to expand...

Hi thanks for your views. :)

The way I see it, if a REIT has no immediate near-term refinancing obligations and their cost of debt is not high, then it need not be fearful of rising interest rates. Also, not all REITs are made equal - some can borrow at lower rates than others due to strong sponsors.
 
M

musicwhiz55

Member
Joined
Apr 26, 2009
Messages
258
Reaction score
1
teerance85 said:
Now is a very very good chance to average down those Reits that are bought high
Click to expand...

One needs to have a very distinct idea of what is considered "value" and "cheap" when it comes to purchasing with a margin of safety. Using previous prices as a gauge is not very instructive as Mr. Market is always alternating between euphoria and manic-depressive. You would need objective measures of value such as portfolio of properties, rental reversion prospects and magnitude, AEI initiatives, DPU stability, cost of debt, WALE period, and other such metrics.

To assess a REIT is not as easy as it seems, as it is essentially real estate and therefore it will be subject to macro forces as well as the state of the real estate industry in Singapore, which is prone to regulations now and then.
 
You must log in or register to reply here.
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ Forums. Forum members and moderators are responsible for their own posts. Please refer to our Community Guidelines and Standards and Terms and Conditions for more information.
Top