As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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Thursday, 5 October 2017

S- REITs As Retirement Income For Cash Tight Retirees???


Investing is about 3Ms - Method, Mind and Money Management

One Starfish found out what was not covered at her paid investment course on Investing on S-REITs for income and learned something practical on money management at the price of Kopi O Kosong!

What wrong with S-REITs as retirement income for cash TIGHT retirees who are depending on investment income to fund living expenses?

































13 comments:

  1. Not only Reits, cash tight definitely will be caught.

    The worst case is forced to sell because of poor cash flow in a depressed market.

    ReplyDelete
  2. Example:
    Cash tight investor in REITs hit by rights issues

    Need holistic approach. Emergency fund, sufficient liquidity for 1-2 years of household expenses, war chest on standby, necessary insurance for liabilities.

    Cannot simply be all-in on investments.

    ReplyDelete
  3. Must also read together with this ....

    http://singaporeanstocksinvestor.blogspot.sg/2011/10/reits-and-rights-issues-dilutive-or-not.html

    http://singaporeanstocksinvestor.blogspot.sg/2011/11/reits-and-rights-issues-singaporean.html

    ReplyDelete
  4. No need to debate on dilution. When one doesn't subscribe to every right issues, the dilution will become clearer after X right issues. This is simple Maths.

    ReplyDelete
    Replies
    1. Yes, there is definitely true in term of share dilution as the share base enlarge.

      However, all time being equal, if the DPU remain same, so do the yield.

      For example a investor owns 10,000 shares @100c and the DPU is 7c, he gets $700.

      After the right issue, and coming year the DPU remain 7c, he still gets $700.

      If he has participate, said add another 10,000 shares, he will get $1,400, still at 7% yield.

      Peace ... :)

      Delete
    2. Simple thinking with simple example . Like that win Liao.

      Delete
    3. This comment has been removed by the author.

      Delete
    4. If dividend yield remains the same after right issues(if can be quite sure),then it's better to sell the the rights if renounceable.

      Of course if it is non-yield accretive, then better sell your right issues and spend your money in some restaurant.

      Even if non-renounceable & non-accretive right issues, i usually just ignore or sell my mother shares lol.

      Delete
  5. Ok so just need to find those reits (stocks also can) that continues to increase dpu year after year.

    Perhaps start with those reits with higher dpu today compared to 2007, coz all reits did a lot of rights issues during GFC.

    Then next time no need spend money to subscribe to rights liao coz confident that dpu will continue to go up. Best if rights renounceable ... Can get xtra kopi money some more 😃

    ReplyDelete
    Replies
    1. Sure...

      Let take First Reits

      2007, DPU 6.70c, 272,307,000 units
      2016, DPU 8.47c, 771,579,000 units

      Despite units increase 2.8X, the DPU increase 1.35X

      More positive note is that in 2007, the share price is ~60c
      In 2016 Dec, share price was ~118c or increase 1.96X

      This is just an example, there may be some Reits do better or worst due to many factors.

      Delete
    2. CapitaComm Trust

      2007, dpu 8.7c, 1,384,692 units, price 140c
      2016, dpu 9.08, 2,963,491 units, price 130c

      DPU and price remain ~ same. In fact, the share price was very volatile.


      Delete
    3. Keppel Reit

      2007, dpu 8.82c, 247,184,000 unit, price 160c
      2016, dpu 6.37c, 3,291,717,000 units, price 110c

      This is loser. both dpu and price down. :(

      Delete
  6. Are rights issue price and number of shares issued between CapComm and Keppel comparable during this time period 2007-2016 comparable?
    See the dramatic increase in units for keppel reits? For those who subscribe to the rights they might not lose out but for those who chose to ignore sure lose $.

    mapletree issued rights but the price issued higher than my bought price, bo bian still have to subscribe. haiz kena sa*.

    ReplyDelete

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