Saturday, 6 October 2018

Singapore Dividends for Financial Freedom - What % of REITS/Trusts should I have?

Good morning party people I trust you are smiling on this overcast Sunday morning.

For the first time this rainy season, little bits of bright blue sky are beginning to assert themselves overhead. With only a month or so left of the rains, it's time to visualize long evenings spent reading on the beach with a cool wind ruffling the green palm leaves. Ahead, past the demerara sugar sands, the ocean, flat and twinkling, relaxes and reflects on the sanctity of life. Psssssssssit! I crack open another beer and toss the lid aside. As the horizon begins to glow crimson, blue and orange, I reflect on how lucky I am to be here; how lucky I am to be alive. In world full of atrocity, pain and existential paranoia, I sit here, wide-eyed, smiling, contemplating the beauty of nature and my place within it.

Living in the topics is more than I could have ever dreamed of as a boy, and it's where I feel home. Like most, I don't want to work for ever. This is not because I hate what I do - far from it. It's just that I know I won't always be able to work at such a frantic pace: days blurring into weeks into months like some sort of purgatorial punishment; missed meals and irrational moods. The pursuit of money will one day take a back seat in my consciousness, and so it's vital to have a hefty income paying portfolio as back up. This will provide the means in the future to lounge around, sipping booze and reading books (two of my favorite things)

I realized this is 2015 - rather late I may add- thanks to a few gentle nudges by wife. She noticed that we worked all the time and our money sat dormant in the bank. At the time, I had a mindset that said the following:

'Well, at least the money is safe.'

'I know nothing about the stock market.'

'I didn't study finance.'

'Investing is for rich people.'

'The stock market is for greed-heads.'

If any of you have ever had such thoughts, I'm sure you can empathize with me. Honestly, I thought with my extensive background in reading classic literature and living in far flung places in the world, I had life all worked out. But, I was wrong.

So, what was the turning point? How did I make the shift from an artsy reader of literature to a income investor?

Socrates said 'True knowledge exists in knowing you know nothing.'

I heard this quote on the 'In Our Time' show hosted by Melvin Brag on BBC Radio 4, and it got be thinking.

My  wife continued to urge me to read the financial section of the newspaper - at which I grimaced. All those ratios and numbers; all those greedy corporate assholes; all those anachronisms! Screw all that...

However, Socrate's quote bounced around my head like a pinball, and little by little my ego retracted.

'Perhaps I know less than I think.'

This phrase invaded my consciousness like the evening does the day and I began my reading.

I will talk in later blogs about books, blogs, blog and podcasts that have influenced me over the past 4 years. For now, I must talk about my portfolio's REIT allocation.

Presently, I have the following holdings. I've divided them into sectors with % of total portfolio.

Keppel DC REIT7.00%REIT data center (alternative)11%
AimAMP Cap REIT3.00%REIT industrial17%
Ascendas REIT14.00%REIT industrial
AscottREIT2.00%REIT property19%
Fraser Com Trust14.00%REIT property
Capita Com Trust3.00%REIT Property
First REIT9.00%REIT healthcare9%
CapitaMall Trust4.00%REIT retail4%
Global Investments1.00%Trust investment1%
Acenndas H Trust5.00%REIT hospitality9%
Accordia Golf Trust4.00%Trust golf courses hospitality

REITS and Trusts Total = 66%

Some might say this is rather aggressive, but I don't think so.

The rest of my portfolio is made up of blue chip divided payers, all of which I plan to hold for as long as possible.

SingTel6.00%Stock telecommunications8%
Starhub2.00%Stock telecommunications
SATS1.00%Stock Airport management and services1%
Keppel Corp1.00%Stock oil etc. and property1%
DBS0.10%Stock bank0.35%
UOB0.25%Stock bank
SGX3.00%Stock stock market etc.3%
Singpost2.00%Stock post and logistics2%
Kingsmen Creative1.40%Stock marketing events and displays1%
Sheng Siong5.00%Stock supermarkets17%
Thaibev12.00%Stock food and bev

Blue Chip Dividend Payers Total = 34%

(I'm aware a couple of the shares in there are not blue chips)

As you can image, this portfolio is generating a large amount of cash all of which is pumped back in. between Jan and Aug 2018 passive income stood at $28,000 (Singaporean) which is not to be sniffed at. Give it ten years and this has the potential to be a worthwhile project.

The questions is though, do you think the REIT and Trust component is too meaty at 66%?

I'm happy with the risk, but is this just because I ignore the realities of a rising interest rate environment, or is it that I understand the likelihood of all being fine in two decades time? 

I'm not sure I know the answer myself.


  1. I think the allocation is good. With more reits comin down im looking to increase my allocation further too. $28k ytd is a massive amount!

  2. Thanks for the comment, B. I think I'll continue to take advantage of the rising interest rate environment as well to get some REIT bargains. Onward!

  3. Had made a comment on your portfolio allocation in an earlier post of yours - I was wondering what age range are you at now? Being a rather conservative investor, I think that 66% into a single asset class (albeit diversified within this class) might be a tad too risky? I too am tempted to accumulate more dividends by increasing allocation into REIT and blue chip counters but I'm still hesistant about taking on the added risk. For context, I'm in my early 30s and my portfolio consists mainly of stock and bond ETFs in SGX and HKEX.

    p.s. that $28k in dividends is admirable!

  4. Hi Patryk. I'm a similar age to you actually. Having a diversified batch of REITS in and around 60% of the portfolio is risk I am willing to shoulder for the dividend return.

    Which REITS are you interested in buying at the moment? There some value around!!


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