How does my REITS portfolio look? - Seedly

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Asked by Terry Choo

Updated 2w ago

How does my REITS portfolio look?

I'm new to REITS, and having read up about the different reits, I would like to invest in 3 REITS using a regular savings plan(POEMS). Namely CapitalLand Mall Trust, MapleTree Commercial Trust & Ascendes REIT. I'm planning on consistently investing every month using the DCA method(LONG TERM 10 years or more). What do you think of that? My current concern is I have difficulties deciding when to enter the market. Please help me out, any feedback, recommendations or advices will be appreciated.

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Takingstock @
Takingstock @,
Level 4. Prodigy
Updated 2w ago

Lets take an approach for you to help yourself. Like the answer above, are you able to explain why you choose reits, those reits and no other stocks?

Reason why I am asking to find out

  • are you a little more on the risk averse side?
  • is it because you prefer regular dividend payouts for cashflow?
  • are you open to choosing something else?
  • Do you have a particular goal or timeframe?

I think you need to figure out some of these first before folks can advise.

Without going into the details, on face value, I have no issues with the three listed reits, they are in my portfolio. BUT I stopped my monthly investments into them as I feel the reits are slightly overpriced now.

Having said that, I did come up with an approach like a modified DCA on top of DCA. As you are looking at a very long term approach, it may not be a bad idea to start a small position then adjust as you go along because time in market is better than timing.

Let me assume you work for less than 5 years, you can save a fixed amt each mth, and also assume you are adverse to picking the sti index fund or stocks, and also you prefer cash savings / investment to prepare for a hdb purchase or wedding.

  • if you have outstanding credit or tuition loans, clear that first.
  • if you cleared those, no major debt, and got 3 mths reserve already then

Maybe you can try this (assuming you only open to the three reits n nothing else) Set up the poems to do only monthly contribution to one of the three reits (you do your homework, and choose the best among them, probably using dividend yield as tie-breaker). The monthly transaction fee / monthly contribution should be less than 2.5%, but up to you to choose the amount.

You do quarterly check-ins and re-rate the three, probably using yield as one of the major deciding factors again. If the re-rating shows another of the three reits to be better, you update the monthly contribution to change to that reit.

This would lead to preferential throwing the contribution at the best reit of the time, and after some time / years, the portfolio should be reasonably balanced at optimal cost.

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Takingstock @
Takingstock @

2w ago

@Terry I don't think its right for any to push for some sort of buy decision. What I do think is right for you is do homework and analysis. The market is always there. You can wait for the reits to announce the results - in a month or so, and they would prob issue some sort of dividend guidance, which you can calc the expected yield. For the three reits, a fair yield should be 6% at least. Hence most would say they feel its expensive to buy now.
Takingstock @
Takingstock @

2w ago

Chill and be patient. Promo codes will appear from time to time. Keep your eyes open for the offer. The counters are good, but keep in mind you might not get the best bang for your buck right now. In fact if you keep your eyes open there are other items on good discounts. Warren Buffet said the value of your investments is decided by the price you bought (more than the price you sold). Its true.

Quite expensive to enter into these reits now, given their high current prices. You may want consider doing manual dca when the spread between current prices and historical nav is at a low point. Frankly I won't consider using share builder due to the high comm and the levied fees for dividends.

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DCA monthly is to help with your difficulty of timing when to enter. Just do it consistently and let it be on autorun.

As to why you pick those 3 reits only, why not pick a reit etf if you are interested in reits?

A reit etf helps diversify, and you do not need to worry about rights issues etc.

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Terry Choo
Terry Choo

2w ago

Hi, thanks for the reply. To let you understand a little more. I choose stocks that are available through the POEMS share builders plan. My reason for not having invested in the reits ETF (LION-PHILLIP S REIT) is because, I'm not satisfied with the dividends and growth of the ETF, and I do not quite believe that it will experience good growth in the long run.
Gavin Tan
Gavin Tan,
Level 3. Wonderkid
Answered 2w ago

Honestly if you are planning to DCA, especially for a long period of time, it doesn't matter when you enter the market.

As the saying goes, "time in the market is more important than timing the market itself".

If you really want to time, now is definetly not a good time as, all these REITs are very close to their 52w high, so now would not be a good time to go in.

Any particular reason why these 3 REITs?

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