The bears den

[DukeCS33]

Reits and ETFs are going to become negative black swans for most people

Only when the property bubble bursts... Reits would be hit with negative valuations on the assets on their books. The real hit comes if the economy in which the asset is situated goes into a recession... dpu would be hit. Singapore reits are not overly leveraged and that is a plus point. However with the economy slowing down, could they still maintain occupancy and dpu at current levels? Projection for Singapore's gdp is now close to zero. Would an escalation of the trade war push us into negative growth? I would not say that we are having a black swan event but in my mind, the current valuation is a bit too rich and therefore susceptible to a decline if dpu rates cannot be maintained. So there may be better levels to pick up Reits. Having said so much, I am still very much liking this asset class and would be ready to scoop some at cheaper levels.

 

[FrostWurm]

Reits and ETFs are going to become negative black swans for most people

Just for the record, "ETFs" are not an asset class. They can vary by region, sector, asset class, and even strategy.

 

[SBC]

I am re-stocking my VIX holding in preparation for the black swan ahead.

 

[Shiny Things]

Reits and ETFs are going to become negative black swans for most people

SG-REITs I can go with: smarter people than me are saying SG-REIT valuations are incredibly stretched compared to private-market transactions. But how are ETFs going to become a “negative black swan”? I’d be interested to know.

 

[Trader11]

SG-REITs I can go with: smarter people than me are saying SG-REIT valuations are incredibly stretched compared to private-market transactions. But how are ETFs going to become a “negative black swan”? I’d be interested to know.

Liquidity problem might drive the etf prices down compare to the actual index. No one guarantees the price will match the actual assets.

 

[Entry Level PC]

imho property bubble won't come till end of 2020.
60 years lease become 0, gahment take back without compensation.
if Bear is coming, people should stock up on physical gold bullion instead.

 

[FrostWurm]

Liquidity problem might drive the etf prices down compare to the actual index. No one guarantees the price will match the actual assets.

You do know that that an arbitrage mechanism (not done by commoners like you or me) exists to prevent the price of the ETF from deviating too much from the underlying securities right?

 

[SBC]

Thousands are visiting showroom every week. Hundreds are buying them every week.

Where got black swan?

 

[Merg91]

Why the lease ending = property bubble ?
China /HK leases are 60 but anywhere else?

imho property bubble won't come till end of 2020.
60 years lease become 0, gahment take back without compensation.

 

[DukeCS33]

Thousands are visiting showroom every week. Hundreds are buying them every week.

Where got black swan?

Never say never. This type of events hit you when you are least suspecting. And the thousands visiting showroom and hundreds buying is the type of snowballing effect that erupts into a black swan event. At the height of the GFC 10 years ago, there was a buying frenzy fueling MBS and we knew the outcome thereafter. I guess if one looks at the cost of house to one's annual income ratio, and if that jumps up, then we know that a bubble is building. All bubbles will burst one day.

 

[DukeCS33]

Reits and ETFs are going to become negative black swans for most people

The term "negative black swan" does not sound quite right. A black swan event is a negative event no? Negative and negative = positive?

 

[Merg91]

Powell Speaks, Trump Tweets, China Reacts, Markets Freak. Repeat

Investors are reacting not only to earnings and economic growth, but also to unpredictable moves by influential policymakers.
https://www.bloomberg.com/news/arti...=businessweek&utm_campaign=socialflow-organic

 

[DukeCS33]

https://www.zacks.com/stock/news/50...endar-trending_topics_popular-ID01-txt-505495

Good article (minus the not too subtle embedded advertisement) for your reading pleasure.

I identify with several points especially the one "Adjust to your Environment".

 

[Knightoftheblackrose]

Powell Cough + Trump Tweet = Negative Black Swan

The term "negative black swan" does not sound quite right. A black swan event is a negative event no? Negative and negative = positive?

 

[SBC]

China export number looks bad.

 

[SBC]

https://www.zacks.com/stock/news/50...endar-trending_topics_popular-ID01-txt-505495

Good article (minus the not too subtle embedded advertisement) for your reading pleasure.

I identify with several points especially the one "Adjust to your Environment".

That’s why it is always good to include VIX in your holdings.

Especially so like period like now.

 

[Entry Level PC]

Why the lease ending = property bubble ?
China /HK leases are 60 but anywhere else?

Years of lease goes down but price goes up for resale.
Irrational market at work.

If no price adjustment then i worry.

 

[Mr.Canberra]

D Day coming for Hong Kong!

 

[DukeCS33]

That’s why it is always good to include VIX in your holdings.

Especially so like period like now.

To me, having vix in the portfolio is as good as applying a hedge and since it is negatively correlated to risk, it does not add on to overall returns on a risk adjusted basis.

 

[Trader11]

The term "negative black swan" does not sound quite right. A black swan event is a negative event no? Negative and negative = positive?

Bro, read the book. Black Swan can be positive or negative payoff