S-REITs are having their limelight in the recent weeks. With the announcement of QE3 and the low interest rate environments expected in the near term, many analysts are crying out BUY calls for S-REITs. Kim Eng expects another 11-14% upside for the S-REIT sector due to the low interest rate environment. Apparently, many pension, insurance and income funds are switching into the REIT sector which provides better yields than bonds.
Of course, I am cautious when I hear all these positive news. After all, S-REITs have been featured in the past few weeks in newspapers and I know the saying that goes "Buy when people are fearful". And if people are so hopeful now, perhaps it is a good time for me to sell.
With the increase in S-REIT stock prices over the past few weeks, I have liquidated almost all my REIT holdings less a few. One of them is my favorite REIT (yes, I know we are not supposed to fall in love with our investments). But I have grown this emotional attachment to this REIT which I have held for some time.
This is Ascott REIT which I bought some time back. For my August dividends, most of them came from Ascott REIT. I have bought in and sold out on First REIT many times and looking at the share price now of around $1, I sort of regret that I exited it too early. With Ascott REIT, I am not certain whether it can rise any further. But with good earnings yield and dividend yield, I am probably going to keep this REIT in my portfolio for a long time to come.
First Reit and Ascott still yield above the average REITS in general. I think there's potentially still demand for it :)
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