I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

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Wednesday 24 November 2010

REITs. Simply explained! (6)

Read? Why REITs and Business Trust are not always good investments

Reproduced part of it here:

"Investors should not harbour any delusions that REITs are created primarily for their benefit. REITs are created first and foremost to help owners dispose of unwanted assets.

As a general rule, the best assets do not get sold into a REIT, they are held forever by the original owner. From a purely rational perspective, REITs are simply a convenient dumping ground to offload undesirable assets to a gullible public. An outright sale would be difficult since the buyer would likely do due diligence and negotiate a discount for lousy assets. But the public can be convinced to buy anything in a bull market. In fact very little convincing is needed – the public is happy to convince itself, especially in today’s low-interest rate environment.

Sponsored trusts are created to help owners divest unwanted assets. The management fees are just a bonus.

Non-sponsored trusts are created primarily for the management fees."

Read? REITs. Simply explained! (5)

Capitaland and its six REITs

At CPL Celebrating 10 Years Investors Day, someone asked the Horse: "Should I buy CPL or its REITs?"
The Horse replied: "Depending what you want. You want growth with some income buy CPL. If you want income only then buy REITs."
More understanding from the Horse's Mouth
"CPL is actively re-cycling its capital to maximize returns to its shareholders. When a piece of its properties has become MATURED it will then offload it into one of its REITS to recover its capital and to look for better investment yield by taking higher risks"
Why not simply ask any experienced private property investors, will they invest in matured properties just for their rental yield? What can you expect from their answers, good or bad?

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