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Defensive stocks and REITs outperform in volatile times.

Tuesday, June 12, 2012





Market volatility has become a norm and it is getting harder to time the market. Rather than sitting on the bench and having your savings eroded by inflation, REITs have what it takes to provide you the value protection barring any major exogenous shocks. Defensive play would be better option taking into condition of the current erratic climate. Above all, the compelling yield will support the price and smoothen the overall individual’s portfolio returns.

Source: Phillip Capital
Read: REIT Sector Update, 12 June 2012.


Related posts:
1. Investing in REITs: A flawed strategy?
2. Telcos and REITs are top performers in May.

6 comments:

SnOOpy168 said...

er, would this mean that in the good times or bull run, REITs would be side stepped ? I am still newbie to see the trends here. Nonetheless, I am still parking my spare cash into this whenever i can at the acceptable pricing.

AK71 said...

Hi SnOOpy168,

Who can say for sure? Since the start of the year, FCOT and AIMS AMP Capital Industrial REIT have both gained 20% in unit price seemingly in tandem with the stock market rally and when stocks turned down, their unit prices stayed bouyant. ;)

I like what you are doing, parking spare cash in REITs as and when unit prices are good enough for you. :)

FoodieFC said...

earlier this year, reits was not hot.. now it is! although I am vested in reits, I thought the recent downturn will allow me to purchase more. but apparently not the case,they are all still too high (for me, i am waiting for correction )

AK71 said...

Hi FoodieFC,

Well, the time to be interested in anything is when few are interested in it. Although many more are interested in S-REITs now, there are still many who are not. ;)

I believe that Sabana REIT is still an attractive proposition at the current price of 95c per unit, for example. We could see a weakening in unit price and if it should happen, I see support at 91.5c thereabouts.

When the S-REIT camp gets really crowded, it would be hard to even find 8% distribution yield in any S-REIT. Just my guess. ;)

JCK said...

Still waitin patiently for Sabana at SGD0.92 ! :)

AK71 said...

Hi JCK,

Sabana REIT is already the largest investment in my portfolio. So, I am in no hurry to add. I am equally happy whichever way its unit price goes. :)

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