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My last blog on ComfortDelgro attracted some very thoughtful comments from readers and if you are interested, read them: HERE.
I said in reply to a comment that I have been trying to build a more resilient investment portfolio for a few years by now.
Most of this effort has been centered on increasing the size of my investment in the local banks.
I believe that I have strengthened my investment portfolio's resilience in the most recent bear market this way.
This short blog is in reply to the latest comment by a reader in the abovementioned blog.
The reader's comment was about Far East Hospitality Trust.
My reply:
Yes, just like SIA and even SIA Engineering, the hospitality sector has been hard hit by the COVID-19 pandemic.With the latest Omicron variant, it doesn't look like things are going to improve by much anytime soon.
Of course, even the most well thought out plan could go wrong.
Omicron Covid variant spreads 'more than twice as fast' as Delta - BBC News
Buying into hope might be just as painful as buying into hype if things go very wrong.
I significantly reduced my investment in Ascott REIT-BT some time ago.
However, I still retain a smallish position and that exposure to the hospitality sector is enough for me.
Having a larger exposure to the hospitality sector might give outsized returns if the pandemic subsides soon, of course.
As the ongoing COVID-19 pandemic has shown, however, a larger exposure does not make for a more resilient portfolio especially if we are mostly investing for income.
This is especially the case when we are buying into REITs and business trusts which pay out almost all their operating cashflow to their investors.
This is unlike businesses which pay out a fraction of their earnings as dividends to their investors.
With interest rates more likely to rise than not in future, we might want to invest in businesses that will benefit from rising interest rates instead.
As always, it is never my way or the highway.
Have our own plan and we should keep it grounded with realistic expectations or at least try.
Of course, even the most well thought out plan could go wrong.
If we must gamble, make sure the bet will not sink us financially and degrade our lifestyle if things do not go our way.
AK is just talking to himself and seems to have gone off topic.
Anyway, remember that the COVID-19 virus is still here in all its mutations.
Continue to be cautious and stay safe to keep all of us safe.
References:
Bloggy Award
4 comments:
Dear AK
Agree fully. As I had said earlier, for most small investors like myself, the top priorities remain fixed. First is capital protection and second is returns on investment. This could be in the form of regular dividends or capital appreciation, ideally both. In the current environment, despite all the promises of recovery and reopening, capital allocation needs to be carefully planned. Personally, I will rather invest in the three banks and established industrial and logistic REITs and maybe a bit in office/retail REITS rather than punt on hospitality sector
Garudadri
Hi Garudadri,
As smaller investors, we definitely have a lot less firepower.
For example, we cannot be like Charlie Munger who can afford his high conviction entries in Alibaba Group as its share price plunged.
I feel that our strategies are similar and, so, good luck to both of us. :)
Hello AK,
Hope you are well! have not left comment for long time (but still loyal reader :p). You have not blogged on QAF for lonnnngggggg time. wondering if you are still invest on it and if you dont mind talking to yourself on that. Thank you!
Hi Wentworth,
Still holding on to my investment in QAF.
It is chugging along and generating passive income for me.
Nothing new to say, really. :)
Oh, I now buy the Low GI bread by Gardenia.
Not the multi-grain loaf but the one made from barley flour.
Been having it for a few months now.
Still relatively new to me, I suppose. ;p
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