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REITaility Check

I think the sharp drop in REIT stock prices caused a reality check and some panic selling in the Singapore market. Is this the burst of the yield bubble which i first talked about in October last year? Even Mapletree Greater China Trust was not spared and dropped a significant 7.5% this week. 

The series of upgrades by analysts last week caused me to make a mental note to take profit on this counter if the 1.11 support was breached. 

Unfortunately, i am out of office this week and by the time i had a chance to look at my portfolio yesterday, it was already trading at the support level of 1.04. The triggers on my SI Station (including my other counters) has been sounding non-stop the moment i started up the application. ^_^

 

Anyway, i have set another trigger at 1.02, i will sell my positions in MGCCT is the final line of defense is breached. This time better tell my broker the plan as i am travelling again next week. :(

How you should monitor your portfolio?

All human beings are unique, so don't expect me to tell you what you should do with your money or investments. I typically won't answer those questions because i have no answers. I have shared with you previously that you should know your own time frame and your should know yourself before you venture into trading and investing. Its okay to pay school fees and learn from your mistakes. I have paid countless school fees but just make sure it doesn't wipe you out and don't take leveraged position if you don't know how to cut loss.

How i monitor my trading portfolio

For my trading portfolio, i am pretty nimble. I trade in bigger positions and have a tighter cut loss. My objective is trading income and it is more 'technical' in nature. Currently i have no trading positions because i have taken profits on them when they hit my targets. If they have not hit my targets, i would have cut loss on them anyway. I will trade only if i have time to look at the market.

How i monitor my investing portfolio

My investing amount is smaller, my time frame is longer and my objective is passive income. You know what i have in my SRS portfolio. However, having said that, i do have a "cut loss" or "take profit" level as well. I had wanted to take profit on M1 when the yield compressed to below 4% but i haven't got the time to sit down and give it a serious thought. I usually get out when valuations get out of sync with the market but it is more 'fundamental' in nature. I do have a stop loss level as well because it is to protect my capital. Currently my SRS portfolio is up about 16%, i will probably get out to protect my capital if there is a big market crash and then slowly build up my portfolio again during the crisis as there are more bargains to be found.



Food for thought: If you are losing sleep over your stock market portfolio, either your position is too big (relative to your entire personal wealth) or you don't know what you are doing (and is therefore afraid of the unknown).  

Fed Reserve and you

One word from Bernake and the market came crashing down?



I have to tell you that the low interest rate environment will not last forever. There will be a point in time Fed has to raise the interest rate and when they do so, the prices of REITs and bonds will fall. At which the prices of real estate will probably need to take a correction as well. My "crystal ball" says it will probably be around 2015 (plus and minus) that interest rate has to go up. Take it with a pinch of salt but we can check back this page again in 2015.
 

4 comments:



  1. [[ anonymous 7 ]]

    I didn't really realise Mr IPO had some many blogs. I thought they were third party blogs.

    Anyway, FWIW, my entries for MapleTree China were 93 cents, and about $1.02-1.04 (not too sure, didn't check closely).

    I didn't waste my energy feeling excited when the share price went up, and am not bothering to feel depressed now that the price has come down.

    I'd wait for the dividend, and not get carried away with any upside wealth effects.

    ReplyDelete
    Replies
    1. Haha. Yah multiple blogs. Each blog for a different theme so that readers understand the different mindset required for each blog.

      A7 - you sound quite savvy. Been investing for a while now?

      Delete


  2. [[ anonymous 7 ]]

    In the article above, Mr IPO said : " your should know yourself before you venture into trading"

    It seems to me that Mr IPO is busting his guts trying to inform traders about themselves.

    I want to add something about knowing your biases, and the latest article on this is from Zerohedge, citing article from Asia Confidential.

    The URL : http://www.zerohedge.com/contributed/2013-05-25/why-central-bankers-rule-world

    See the section about "Cognitive biases at work".


    Central bankers can rule the world because of investor's biases. Readers can discuss the matter with amongst themselves, and also with their kids.

    The more one knows about oneself, the better I think.



    ReplyDelete



  3. [[ anonymous 7 ]]

    re : Mr IPO : My "crystal ball" says it will probably be around 2015 (plus and minus) that interest rate has to go up. Take it with a pinch of salt but we can check back this page again in 2015.


    =========

    Lets talk about Mr IPO's crystal ball. 2015 interest rate rises.

    No crystal ball is in fact required to say the existing "lax" money
    policy is already, and in the present, not appropriate for asia.

    I suggest keeping all dividends without spending it. Avoid chasing up fixed income instruments (including REITs) if possible. There already enough uses for such dividends without having to spending it as well.


    If your REITs or whatever else rise in value / price, just forget it, and do not fall prey to the "wealth effect" syndrome. That is a major weakness.

    If the central banks refuse to tighten monetary policy, I'm afraid we just have to tighten it up for them.







    ReplyDelete