Something worth thinking about
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We’ve got a terrible war at hand. Whether it’s about to end soon or not, it’s hard to say. But I’ve been watching Singapore REITs fall lately because of this. Not good, not good... What’s happening in the Middle East is obviously making people nervous. There's fears that interest rates could go back up because of higher oil prices and rising inflation. What’s more, the Fed recently put interest rates on hold before further cuts. That made investors even more worried, especially this could mean higher borrowing costs for Singapore REITs. But look, that’s only half the story. Most of the time, my logic tells me this uncertainty is creating an unnecessary selling pressure. I cannot change how the war will play out. I don’t intend to either. Instead I want to give you some things to think about. And that is: What matters is still looking at the underlying assets we own that keep producing reliable cash flow year after year. I’ll explain here. One Singapore REIT that has paid me dividends for years is Frasers Centrepoint Trust. This is a heartland mall dominator in Singapore that owns assets like Causeway Point and Waterway Point. These malls are located near key transport nodes. And they serve as last-mile deliveries and entertainment hubs for nearby residents. Put it this way, there can be no second piece of land that will be as prime as the first when it comes to shopping malls. These shopping malls continue to suck up most of the nearby foot traffic. In fact, Causeway Point and Century Square spaces continued to show strong tenant demand, having backfilled with SAS Cineplex and Golden Village respectively earlier this year. Frasers Centrepoint Trust’s growing dividend yield over time matters more to the long-term investor looking to accumulate wealth. What I want to say is, just holding on to its shares since IPO would have grown your dividend yield on cost to 11.7%... Whether interest rates go up or down… Whether oil prices go up or down… Whether I know or not know how long the war is going to last… Singapore REITs are a lot like playing on a Monopoly boardTo win the game, you need to accumulate more pieces of real estate. More assets, more rental income, more passive income. And when bad news, changes in interest rate expectations or even geopolitical tensions bash down high-quality assets like Singapore REITs, it’s a quiet signal to accumulate them again. Sometimes, investing can be simple. Willie Keng, CFA Founder, dividendtitan.com P.S. Like this issue? Click HERE to join other dividend investors reading my DT Compound Letter. I send my regular letters to your inbox. |
Dividend Titan
CapitaLand Ascendas REIT is now trading ~6% dividend yield. What's more recently, Ascendas REIT announced its equity offering to acquire three properties worth ~S$1.4 billion. This is ~10% of its market cap. The deal could further raise the REIT’s DPU by 4%. Not too bad. Not too bad. You’ll expect Mr. Market reacted positively but instead shares went no where after the announcement. So what’s missing here? And is it worth buying today? Let's dive in. Sometimes, investing can be simple. Willie...
We’re going to the mid-election elections again this year. It’s not the kind of thing that dominates headlines every day. As a dividend investor, you’ll know this has been a rough patch for investors. Since 1950, the US stock market has delivered only about half the typical return during the midterm years compared with other years. This is because of political uncertainty, typically marking the weakest year in the four-year presidential cycle. In a normal year, the S&P 500 has returned ~9.5%...
I’m kidding. You can never eliminate market noise. Unless we put a huge box over our head and don’t step out of the house. In recent months, headline news from the Iran conflict keeps changing many times a day. And that’s a big reason why stocks have been bouncing up and down. Somewhere in the middle of all that, I found myself thinking about the most common piece of advice gurus and advisors love to give: “Just ignore the market noise". “Just ignore the market noise.” Yes, they are right....