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Good morning AK,
How are you today? Hope you are doing well =)
Firstly- THANK YOU for sharing the post on CPF interest accrual on funds used for housing! I was wondering why my accrued interest portion kept growing- almost S$6K per year! I am considering some voluntary refund on principal amount to reduce the funds owing to CPF.
I have a new query to get your views- do you plan specifically which categories of stocks and reits to invest in?
As you may recall- I am trying to re-balance my portfolio to release some stocks at the right time and buy some new ones- aim is to increase my income yield from 4% to slightly higher. Look forward to any thoughts that you have...
L
Hi L,
Glad to know you found the blog post useful. Yup. People are usually very surprised when they find out how much they are losing by using their CPF money to fund the purchase of their homes.
Doing voluntary refund since you can afford to will help you to build wealth in a meaningful and risk free manner.
I do not tell myself I must have so many % in stocks and so many % in REITs although I have been trying to build up my non-REIT portfolio due to future interest rates risk.
I invest when offers make sense to me.
When it comes to investing for income, in today's environment, if I can get 8% or higher from well run REITs and business trusts, that's not bad.
For stocks, if it is cash rich, a 3% yield based on a 50% payout or less is not bad but I would prefer 4% or higher.
Each of us will have to find out what is acceptable for us. :)
Best wishes,
AK
Doing voluntary refund since you can afford to will help you to build wealth in a meaningful and risk free manner.
I do not tell myself I must have so many % in stocks and so many % in REITs although I have been trying to build up my non-REIT portfolio due to future interest rates risk.
I invest when offers make sense to me.
When it comes to investing for income, in today's environment, if I can get 8% or higher from well run REITs and business trusts, that's not bad.
For stocks, if it is cash rich, a 3% yield based on a 50% payout or less is not bad but I would prefer 4% or higher.
Each of us will have to find out what is acceptable for us. :)
Best wishes,
AK
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4 comments:
Hi AK,
My take is 7-8% for REITs and Biz Trust, 4-5% for companies with higher growth, 3% if they are blue chips with slow and steady growth. With all investments, the higher risks, the higher returns still takes precedence no matter how much you try to reduce the risk levels.
Hi SCOPION,
All of us must derive something we feel is reasonable and comfortable with. Glad to see what you have in mind. Thanks for sharing. :)
I find it amusing? bemusing? when an investor sets a level of dividend yield they expect/prefer to see.
don't read this as negative.
i would invite the reader/investor to take a look at the historical dividend yields of amazon which also recently just jumped 50% off Feb 2016 lows. or look at the average dividend yields of US companies from 1950s til now.
then I will say I expect 10% bond yields just to entice you to go "huh?"
and end with "all yields expectancy cannot be detached from their historical context."
Hi SMK,
I agree with you that everything is relative.
History will give us a reference and will be helpful in our decision making process. However, we should also take into consideration current day circumstances.
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