When Safe Havens Become Bubbles In Disguise

[chestnut]

Hahahaha.... Lucky I not old. hahahahahaha
The morale of the story is you cannot trust anyone. No one is wise... Not even those using other people quotes. Hahahahahaha hahahaha. Why???? The quotes are from the "wise" whose 'ignorance' unfolds. Hahahahahaha. Wierd quote from an ex us president.

Seems like we cannot trust warren buffet as well.... So let's trust ourselves... Why worry so much about the future... Let enjoy ourselves today !!!!!!!! Hahahahahaha...
Leeds, relax lar.... U keep thinking it is going to be the end of the world, u forget to enjoy yourself.... Be more optimistic... Take quotes from optimistic people... Learn to smell the roses... What is money without optimisim...

You should take optimistic quotes and paste it around... It will be good for everyone....

Brudder, cheers and be happy

[chestnut]

My favorite all time quote
"old man cannot borrow from bank unless he has collateral or money"

So make sure u have money when u are old.... Pure wisdom and ignorance will not buy you hor fun... Only money can get you hor fun... Or married daughters.... Hahahaha... They tend to visit you with a pack of hor fun... That's what I was told from favorite quotes from the elderly.... Hahahahah

[kane]

Many years ago I was on a training course with an italian. Young chap and partying every night. I asked him how he kept that up. And he said "si vive una sola volta"... (you only live once).

No point scared this scared that. To be afraid is to still be alive and that is worth living.

[indomie]

What five secrets about life can you learn from those who have lived the longest?
by eric barker

Email


*

A piece in the Harvard Gazette covers what Karl Pillemer of Cornell University learned from studying nearly 1500 people age 70 to 100+ for his book “30 Lessons for Living: Tried and True Advice from the Wisest Americans.”

What insights did he come away with?

1) Remember that life is short.

His research began with a simple question: “What are the most important lessons you have learned over your life?” Respondents included homemakers, entrepreneurs, and even a former Tuskegee airman, and their answers touched on topics like marriage, children, money, work, aging, and health.

One unanimous refrain included just three simple words: Life is short.

2) For career? Do what you enjoy.

Though many survey participants had lived through hard economic times, instead of urging younger people to get steady, well-paying jobs, they consistently said, “Do something you enjoy.”

“Based on this extremely acute awareness of the shortness of life, everybody argued you should find work you love; work ought to be chosen for its intrinsic value, and for its sense of enjoyment, sense of purpose. And life was much too short to spend doing something you don’t like, even for a few years.”

3) Healthy living? “Treat your body like you’re going to need it for 100 years.” With modern technology, unhealthy living doesn’t mean you die sooner, it means reduced quality of life when you’re older.

Instead of offering advice like “eat your vegetables,” “go to bed early,” or “don’t smoke,” participants in the survey consistently responded, when asked about their health: “Treat your body like you are going to need it for 100 years.” …The elderly, he added, understand that modern medical technology means people with unhealthy lifestyles are “sentencing themselves to 20 or 30 or 40 years of chronic illness.”

4) Biggest regret? Pointless worrying.

Similarly, respondents surprised Pillemer when he asked them to name their biggest regrets. Instead of listing concerns like affairs, addictions, or shady business dealings,*almost unanimously they answered: “I wish I had not spent so much time worrying.”

5) Happiness? Don’t make your happiness contingent. Be happy in spite of bad times.

Another standout lesson from the survey involved the notion of being responsible for one’s own happiness.*While it sounds like a cliché, said Pillemer, “It’s a critical part of their lived reality, and their argument is as follows:*Younger people tend to be happy ‘if only’. … Their view from later life is that this has to morph into being happy in spite of things.”

[star]

What happen if the market did not crash for the next 10yrs? If you are 45yrs old now wait for 10yrs u will be 55yrs old and bank can only loan u maximum only to 65yrs old. If u r 55yrs now u wait 10yrs game over. Alot of people just wait too long. Like chestnut said: "old man cannot borrow from bank unless he has collateral or money"

[Rosy]

I will bet on the possibility of having a property correction within the next 10 years. However, i believe the degree of correction will be lesser than before.

Policy and regulations tend to change according to economic situation. Last year, we are still able to borrow up to 75years old.

[Lovelle]

I thought Mr Chestnut had just shared with you the pains he suffered for 10 years with a negative asset he bought in 1996.

Amber,

which investment one does not need to suffer ? with his 10 yr rental collection, it bounced back to gain.

look at gold. there is no straightline investment.

[Lovelle]

My favorite all time quote
"old man cannot borrow from bank unless he has collateral or money"

So make sure u have money when u are old.... Pure wisdom and ignorance will not buy you hor fun... Only money can get you hor fun... Or married daughters.... Hahahaha... They tend to visit you with a pack of hor fun... That's what I was told from favorite quotes from the elderly.... Hahahahah

hi mr chestnut

why did you borrow money lately ?

[chestnut]

hi mr chestnut

why did you borrow money lately ?

When interest is so low, putting it in instruments can earn u more. Tell u a secret, the money I borrowed can be paid back by the money I am holding. And I can also pay off my loan within a year or so. So why not.

But if u borrow, please know what to do with the money. I am so under leverage so the money I borrowed is for 'fun' to make me save and pay off. Hahahaha, I am getting very complacent lately.

I am now in Melbourne doing wine tasting. Must enjoy life...

[samuelk]

I am just observing general human's behaviour of not wanting to share their bad investment decisions. It should not be viewed as a kind of personal assumption I had about you. My apologies if that was the way it was perceived.

Yeah.. buy high .. sell low.. that's what my Finance manager did... speculate in company own share thinking that he know enough of the company direction, but din expect the sub prime to hit. Subsequently din have holding power ..lost tons of his retirement funds

[Lovelle]

Yeah.. buy high .. sell low.. that's what my Finance manager did... speculate in company own share thinking that he know enough of the company direction, but din expect the sub prime to hit. Subsequently din have holding power ..lost tons of his retirement funds

this case, maybe over leverage ..

[Rlin]

That is a good article Amber. If you don't mind, may I know from where the article came from ?

When Safe Havens Become Bubbles In Disguise


The search for yield in an increasingly yield-less world has become the biggest financial sport in town. The logic is understandable. Thanks to our beloved central bankers, traditional investment portfolios heavily reliant on government bonds and cash are earning little, or worse when inflation is taken into account. Because of this, money is making its way into areas such as corporate bonds, junk bonds, real estate and high dividend yielding stocks. The problem is that many investors are now buying yield with little regard to the price that they’re paying. That’s the stuff that bubbles are made of and why some perceived safe havens may prove anything but.
Today, Asia Confidential is going to explore the causes of the growing “yield bubble” in more detail and the ways that it may all come unstuck. We’ll also look at how some of the current hot asset classes are almost guaranteed to earn poor returns on a long-term timeframe. Lastly, we’re going to suggest how investment portfolios may be structured to minimise exposure to the more bubbly assets and still earn respectable (not high), low risk returns.
The great manipulation
For the most part, we don’t live in a free market world anymore. Since the financial crisis, there’s been unprecedented intervention by central banks in the developed world via quantitative easing (QE) and their zero interest rate policy (ZIRP).
QE involves central banks printing money to buy bonds, largely from banks. The aim is that banks will lend this money out and that the money will make its way into economies through consumption, investment and so on. The problem is that this hasn’t happened. Banks have held onto the printed money due to new regulations requiring they hold more capital and their customers have been unwilling to take on more debt as they’ve been too busy paying off existing debt.
The commercial banks are ok with this because the money that they’ve been kindly given by central banks is helping them to improve their balance sheets after their enormous risk-taking blew up in 2008. Central bankers aren’t as impressed because the printed money isn’t flowing through to economies. That’s why you’re hearing suggestions in the U.S. that banks should be forced to start lending more money.
The other important aim of QE though is for bond yields to remain artificially low. The central banks are saying to people: “We’re going to print money to reduce the value of your cash and we’re going to make sure you earn little on your bank deposits. We want you to depart with your cash to take on more risk.”
The theory behind this is the so-called wealth effect: if people move cash into the likes of stocks and real estate and these assets increase in value, they’ll feel wealthier and increase their consumption of goods. A win-win for everybody, it would seem. However, there’s no proof that the wealth effect actually works, even though central bankers remain convinced that it does.
Putting this aside, it’s clear that cash previously held as bank deposits is starting to make its way into various assets. People are searching for yield. There’s been a lot of recent hoopla about a great rotation out of bonds into stocks, but the truth is rather different. It’s bank deposits that are making their way into stocks. And money is also pulled from commodities and parked in stocks.
But it’s certain types of stocks, namely those with high dividends, that are catching the best bids. High dividend yielding companies in sectors such as utilities and consumer staples have been outperformers and now trade at extensive premiums in most markets. In Asia ex-Japan for instance, utilities trade at 15x 2013 earnings, a 25% premium to the region. That’s despite them generally having poor returns on capital and significant regulatory risk.
It’s not only high dividend yielding stocks that are attracting money, however. Investors are converging on corporate and junk bonds in their search for better yields over government bonds. Real estate is the other area which is continuing to attract investors who are seeking both yield and security. This is particularly the case in Asia versus other parts of the world, as inflation rather the deflation remains the key problem here.
Possible endgames
If we acknowledge that some of these high-yielding asset classes now appear elevated or even bubbly, then the next question is: what are the potential triggers for these bubbles to eventually pop? Rising inflation is the obvious one. This would lead to hikes in interest rates, or a tightening cycle in economic parlance.
Under this scenario, most bonds, particularly government bonds, would get crushed. So would real estate, where over-leveraged speculators in over-priced areas such as Beijing, Singapore and Hong Kong would suffer most. Rising inflation would actually be positive for stock markets to a certain point. In the developed world for example, history suggests that inflation doesn’t start to hurt stocks until it reaches around the 6% level.
The other possible trigger for the current yield bubble to burst is deflation. Under this scenario, investors would scurry back to government bonds and cash. Stocks and real estate would get hammered.
Regular readers will know that I think serious inflation or deflation are the most likely endgames, with the latter being the most probably outcome. But we could muddle through for a while, possibly a long while, before either of these endgames eventuates.
That means the extraordinarily low interest rates currently on offer may be around for some time yet. And the yield bubble could well get bigger before deflating.
The math doesn’t add up
But do the potential rewards for chasing some of the higher yielding asset classes outweigh future risks? To determine this, let’s crunch some numbers. We’ll first take a look at the popular asset of Hong Kong real estate.
Hong Kong residential property is the world’s most expensive per square foot. According to The Economist, it’s also the second most expensive, behind Canada, in terms of price to rent compared with long-run averages.
Right now, you’ll get close to a 3% rental yield on residential property in Hong Kong. Mortgage rates at the largest lender there, HSBC, increased from 2.6-2.9% to 3.15% in March.
For those that rent out properties they’ve purchased, the positive carry (rent exceeding mortgage rate) prior to March has now disappeared. But that’s not the half of it. The Hong Kong government has increased stamp duty by 2x to 8.5%. There are also other taxes and maintenance spend that need to be factored in too.
Without capital gains, you’re very likely to earn little or no returns on Hong Kong property. But inflation also needs to be taken into account. Current inflation in Hong Kong is 4.4% compared with a 20 year average of 4.6%. Consequently, without significant capital gains, there’s also a high probability of negative real returns (returns after inflation).
Given the paltry potential returns on real estate in many parts of Asia, investors are turning to high dividend yielding stocks for alternatives source of income. After all, if you can get a 4% yield on a stock in Hong Kong for instance, it sure beats the 3% yield from real estate there and the close to 0% on offer from bonds and cash.
While yield is nice, paying up for it can be a dangerous game though. Take Hong Kong’s largest power utility, CLP, as an example. It has about an 80% share of the electricity market. The company has expanded overseas into markets such as Australia and India due to stagnating electricity usage at home.
Currently, you’ll pay 19.7x 2012 earnings for this well-managed stock, compared to 11x for the overall Hong Kong market. CLP also sports an attractive 3.9% dividend yield. And the company has managed to grow earnings per share at a 3.4% compound rate over the past decade.
Let’s assume that you’re looking to hold this stock for the next five years. If the company manages to grow earnings at historic rates and the dividend payout ratio stays the same, you’ll get about a 7.3% annual pre-tax return, assuming the current price-to-earnings ratio (PER) stays the same. That return may not beat the overall market, but it would easily beat the current 4.4% inflation rate, assuming there’s no major spike on this front.
However, if the stock’s price-to-earnings ratio (PER) declines to its historical average of 16.6x, then any potential capital gains would be wiped out, leaving a pre-tax return close to the current dividend yield of 3.9%. That return would likely trail inflation during the period.
And that’s also ignoring any risks around earnings. Profits have actually fallen the past two years due to poor overseas returns, so a 3.4% annual growth assumption on this front may also be optimistic.
Do the potential rewards outweigh the risks for this high yielding stock? I doubt it. But plenty of investors disagree at present due to their willingness to pay up for yield, no matter the price.
Alternative ways to seek low risk returns
This leads to a question that I’ve been getting a lot of late: in a world where many safe havens are not so safe, where can I invest my money to earn respectable, relatively low risk returns? It will obviously depend a lot on your personal circumstances, location, risk tolerance and so on. But here are a few tips:

• If you have to own government bonds, stick to short duration ie. less than two years. Short duration bonds are less sensitive to interest rate rises than long-term bonds.
• Treasury inflation protected securities (TIPS) are also worth investigating. As the name suggests, these bonds protect you from rising inflation. Make sure that you don’t pay up for them though.
• Stocks, particularly ex-high dividend payers, are reasonably priced in many markets, particularly in Asia. Despite long-term risks, they’ve probably got more to run with low interest rates here to stay. Therefore, they’re worth having in your portfolio. To what extent depends on your risk tolerance.
• Gold is worth owning, even if it’s only a small part of your portfolio. It’s a hedge against extreme events and is a great diversifier in an asset portfolio, being totally uncorrelated to stocks and bonds.
• REITs are worth including, albeit only those in less bubbly countries/segments. Research shows that the performance of REITs is also uncorrelated to that of stocks and bonds.
• Keeping cash on hand makes sense. Despite current meagre returns, cash gives you flexibility and the capacity to move when some of the current elevated asset prices pull back.

One last thing to stress is that it’s important to keep a diversified portfolio. The current actions of central banks are unprecedented and no-one can be sure of the end result. A diversified portfolio can help protect your hard-earned money and possibly grow it in a relatively low risk manner.
And that’s all for this week. I’ve got a sick child to attend too and a mother who’s coming into town this evening. It’s going to make for a busy weekend.
All the best,
James

[mcmlxxvi]

What five secrets about life can you learn from those who have lived the longest?
by eric barker

Email


*

A piece in the Harvard Gazette covers what Karl Pillemer of Cornell University learned from studying nearly 1500 people age 70 to 100+ for his book “30 Lessons for Living: Tried and True Advice from the Wisest Americans.”

What insights did he come away with?

1) Remember that life is short.

His research began with a simple question: “What are the most important lessons you have learned over your life?” Respondents included homemakers, entrepreneurs, and even a former Tuskegee airman, and their answers touched on topics like marriage, children, money, work, aging, and health.

One unanimous refrain included just three simple words: Life is short.

2) For career? Do what you enjoy.

Though many survey participants had lived through hard economic times, instead of urging younger people to get steady, well-paying jobs, they consistently said, “Do something you enjoy.”

“Based on this extremely acute awareness of the shortness of life, everybody argued you should find work you love; work ought to be chosen for its intrinsic value, and for its sense of enjoyment, sense of purpose. And life was much too short to spend doing something you don’t like, even for a few years.”

3) Healthy living? “Treat your body like you’re going to need it for 100 years.” With modern technology, unhealthy living doesn’t mean you die sooner, it means reduced quality of life when you’re older.

Instead of offering advice like “eat your vegetables,” “go to bed early,” or “don’t smoke,” participants in the survey consistently responded, when asked about their health: “Treat your body like you are going to need it for 100 years.” …The elderly, he added, understand that modern medical technology means people with unhealthy lifestyles are “sentencing themselves to 20 or 30 or 40 years of chronic illness.”

4) Biggest regret? Pointless worrying.

Similarly, respondents surprised Pillemer when he asked them to name their biggest regrets. Instead of listing concerns like affairs, addictions, or shady business dealings,*almost unanimously they answered: “I wish I had not spent so much time worrying.”

5) Happiness? Don’t make your happiness contingent. Be happy in spite of bad times.

Another standout lesson from the survey involved the notion of being responsible for one’s own happiness.*While it sounds like a cliché, said Pillemer, “It’s a critical part of their lived reality, and their argument is as follows:*Younger people tend to be happy ‘if only’. … Their view from later life is that this has to morph into being happy in spite of things.”

Thank u bro for the excellent post. People we know, celebrities, etc are fallen like dominoes these days at young ages. We would be dumb and not deserving of living long if we are indeed so blind to whats happening to the human condition.

[Rlin]

Hi Amber, the statement below extracted from your posting is indeed worth noting :~

"Regular readers will know that I think serious inflation or deflation are the most likely endgames, with the latter being the most probably outcome. But we could muddle through for a while, possibly a long while, before either of these endgames eventuates.
That means the extraordinarily low interest rates currently on offer may be around for some time yet. And the yield bubble could well get bigger before deflating."


This is interesting view. Deflation the most probable outcome !

[teddybear]

As long as money printing happens and continue, deflation will NEVER NEVER happened! Many govts the world over have already learnt this lesson since 1929!

Hi Amber, the statement below extracted from your posting is indeed worth noting :~

"Regular readers will know that I think serious inflation or deflation are the most likely endgames, with the latter being the most probably outcome. But we could muddle through for a while, possibly a long while, before either of these endgames eventuates.
That means the extraordinarily low interest rates currently on offer may be around for some time yet. And the yield bubble could well get bigger before deflating."


This is interesting view. Deflation the most probable outcome !

[DKSG]

As long as money printing happens and continue, deflation will NEVER NEVER happened! Many govts the world over have already learnt this lesson since 1929!

US and and rest are trying to inflate their problems away.

And the inflation will flow into places like Singapore!

DKSG

[Rlin]

US and and rest are trying to inflate their problems away.

And the inflation will flow into places like Singapore!

DKSG

Yes, you are right that US and the others are trying to inflate their debts away.
But it may not work ..... that is what the article posted by Amber is saying as people in the West are not borrowing as they are busy paying off their debts which they incurred during their boom time prior to the financial crisis.

Money flowing into assets like real estates here, seems to be successfully tamed by CM7 or by tighter immigration policy. I just received news on the rental market that do not look good. ( There are more units come onto rental market competing for tenants, as the sales has been quiet, hence owners put them on the rental market. ) Landlord, besides facing keener competition for tenants , have to contend with tenants employment pass been rejected ( Unheard of previously~ even for those tenants with rental budget above $8k).
As for mass market projects, in Pasir Ris that has just being TOP are facing problem finding tenants. It all sounds quite alarming to me. Not sure it is beginning of oversupply surfacing for both higher end as well as mass market.
Some fellow forumner can share the latest info they personally know.

I am surprised by the swift turn of events as I was expecting inflation or even super inflation with the money printing going on ...................

May have to re-evaluate what to invest I guess.

[rockinsg]

Let me give u a very good advise .. Leave it in bank lah.. please please


Else how we get 1% interest rate
Thanks to u we are

Yes, you are right that US and the others are trying to inflate their debts away.
But it may not work ..... that is what the article posted by Amber is saying as people in the West are not borrowing as they are busy paying off their debts which they incurred during their boom time prior to the financial crisis.

Money flowing into assets like real estates here, seems to be successfully tamed by CM7 or by tighter immigration policy. I just received news on the rental market that do not look good. ( There are more units come onto rental market competing for tenants, as the sales has been quiet, hence owners put them on the rental market. ) Landlord, besides facing keener competition for tenants , have to contend with tenants employment pass been rejected ( Unheard of previously~ even for those tenants with rental budget above $8k).
As for mass market projects, in Pasir Ris that has just being TOP are facing problem finding tenants. It all sounds quite alarming to me. Not sure it is beginning of oversupply surfacing for both higher end as well as mass market.
Some fellow forumner can share the latest info they personally know.

I am surprised by the swift turn of events as I was expecting inflation or even super inflation with the money printing going on ...................

May have to re-evaluate what to invest I guess.

[kane]

1) Remember that life is short.

His research began with a simple question: “What are the most important lessons you have learned over your life?” Respondents included homemakers, entrepreneurs, and even a former Tuskegee airman, and their answers touched on topics like marriage, children, money, work, aging, and health.

One unanimous refrain included just three simple words: Life is short.

3) Healthy living? “Treat your body like you’re going to need it for 100 years.” With modern technology, unhealthy living doesn’t mean you die sooner, it means reduced quality of life when you’re older.

Instead of offering advice like “eat your vegetables,” “go to bed early,” or “don’t smoke,” participants in the survey consistently responded, when asked about their health: “Treat your body like you are going to need it for 100 years.” …The elderly, he added, understand that modern medical technology means people with unhealthy lifestyles are “sentencing themselves to 20 or 30 or 40 years of chronic illness.”

4) Biggest regret? Pointless worrying.

Similarly, respondents surprised Pillemer when he asked them to name their biggest regrets. Instead of listing concerns like affairs, addictions, or shady business dealings,*almost unanimously they answered: “I wish I had not spent so much time worrying.”

I love the above 3 quotes. some people spend too much time looking for sure win investments that don't exist and they hoard money like they will own it for 3 live times... hence, every time they start analysing something, they get paralysed by it.

[chestnut]

I love the above 3 quotes. some people spend too much time looking for sure win investments that don't exist and they hoard money like they will own it for 3 live times... hence, every time they start analysing something, they get paralysed by it.

Brudder, I agree... The only sure win in my mind is fixed deposit @1.1% - anz. But even that - insurance by MAS is 50k. Hahahahahaha

Honestly, there must be bears around.... I am very happy there are quite a few bears... If everyone is a bull, the herd mentality has taken place. Euphoria is here.... When that happens, bro Kane, watch out for stocks, properties, etc... Time to run for the exit.... Hahahahahaha

[kane]

Brudder, I agree... The only sure win in my mind is fixed deposit @1.1% - anz. But even that - insurance by MAS is 50k. Hahahahahaha

Honestly, there must be bears around.... I am very happy there are quite a few bears... If everyone is a bull, the herd mentality has taken place. Euphoria is here.... When that happens, bro Kane, watch out for stocks, properties, etc... Time to run for the exit.... Hahahahahaha

Agree. There is still a lot of cautiousness in stocks. I am awaiting the real bull run. When that happens, there will be a lot of people bragging about how easy it is to make money in stocks. Everyone starts to think they are warren buffett. Heh.
That's my lead indicator to hit the exit.

[phantom_opera]

Agree. There is still a lot of cautiousness in stocks. I am awaiting the real bull run. When that happens, there will be a lot of people bragging about how easy it is to make money in stocks. Everyone starts to think they are warren buffett. Heh.
That's my lead indicator to hit the exit.

Nikkei 225 fits your criteria liao

[kane]

The real bull stretches across all markets. The phrase buy what make what comes to mind. That period, nobody needs skills. But people will mistaken market forces for their own personal skill.

[mcmlxxvi]

US and and rest are trying to inflate their problems away.

And the inflation will flow into places like Singapore!

DKSG

Yep. Better make the best of it while it lasts. Nothing is forever. Just like life.

[phantom_opera]

The real bull stretches across all markets. The phrase buy what make what comes to mind. That period, nobody needs skills. But people will mistaken market forces for their own personal skill.

right, in case of Nikkei 225, no need skill, just read central bank ... 8500 to 13700 is no joke in less than 6m

[mcmlxxvi]

Maybe i am a fool. But for yield, wouldnt it be more hassle free to invest in blue chip vs ppty at todays price?

Ppty has these risks:
Vacancy (drastically affects yield with even one mth empty per renewal)
Maintenance fee up
Sinking funds up
Furniture n fixtures replacement due to misuse
Repairs and reconditioning
Interest rate up
Property tax up

And after the abv costs, yield becomes a meagre 3% or even less.

Vs these blue chip easily 4-5% and very stable businesses.

http://www.fool.sg/2013/02/singapore...ng-blue-chips/

[Rosy]

right, in case of Nikkei 225, no need skill, just read central bank ... 8500 to 13700 is no joke in less than 6m

I had missed out on Japan stocks completely.

Underestimated the pent up demand from the Japanese. Many had ploughed their $$$ from their deposit accounts into their stock market.

Many of my friends missed it too. So, i think it requires alot of skill and gut to enter Nikkei.

[Rosy]

Maybe i am a fool. But for yield, wouldnt it be more hassle free to invest in blue chip vs ppty at todays price?

Ppty has these risks:
Vacancy (drastically affects yield with even one mth empty per renewal)
Maintenance fee up
Sinking funds up
Furniture n fixtures replacement due to misuse
Repairs and reconditioning
Interest rate up
Property tax up

And after the abv costs, yield becomes a meagre 3% or even less.

Vs these blue chip easily 4-5% and very stable businesses.

http://www.fool.sg/2013/02/singapore...ng-blue-chips/

One is hard asset and the other is paper asset.

There is a chance for any blue chips to crash during a crisis and never recover back to their highs.

[chestnut]

Maybe i am a fool. But for yield, wouldnt it be more hassle free to invest in blue chip vs ppty at todays price?

Ppty has these risks:
Vacancy (drastically affects yield with even one mth empty per renewal)
Maintenance fee up
Sinking funds up
Furniture n fixtures replacement due to misuse
Repairs and reconditioning
Interest rate up
Property tax up

And after the abv costs, yield becomes a meagre 3% or even less.

Vs these blue chip easily 4-5% and very stable businesses.

http://www.fool.sg/2013/02/singapore...ng-blue-chips/

Brudder mcm, let me ask u a few questions, ok?
1. Do u leverage on stocks???
2. If u have 1 property, what would u do???
3. Do u dare to do in 1/2 mil for stocks???
4. Do u spread over a few blue chips or single?

Kepland, capitaland were 8 bucks or more and dropped to 1+ at lowest point. Today it is about 4 bucks... With rights issue... It is still down.... Just an example.

If u have multiple properties, I think u need to divest.... Spread the risk...hahahaha

Cheers

[mcmlxxvi]

Brudder mcm, let me ask u a few questions, ok?
1. Do u leverage on stocks???
2. If u have 1 property, what would u do???
3. Do u dare to do in 1/2 mil for stocks???
4. Do u spread over a few blue chips or single?

Kepland, capitaland were 8 bucks or more and dropped to 1+ at lowest point. Today it is about 4 bucks... With rights issue... It is still down.... Just an example.

If u have multiple properties, I think u need to divest.... Spread the risk...hahahaha

Cheers

Truth be told my dear nutnut. I have never ever touched stocks. Closest ever was knorr chicken cube soup stock lol.

That was me wondering aloud... I neednt even have to wonder i guess.. Based on my money in, im doing a very decent 9% yield across all my ppty portfolio after all taxes and costs.

Yeah. Leverage is a very powerful L word. Other than Lube or LeeKY.