Dabbling in REITS

Having suffered significant losses in blue-chip stocks in 2018 due to my ill-timed purchase of Singtel and Raffles Medical stocks in 2017, I was slightly reluctant to further invest in blue-chip stocks. Hence, I decided to turn to REITs or Real Estate Investment Trusts as they offer attractive dividends and relatively stable prices.

My only knowledge of REITs at that point of time was that a REIT collected rental income from tenants, and it distributed the income back to stockholders. However, I was unaware of the different types of REITs and the fact that a REIT was legally obliged to redistribute at least 90% of taxable income. By a stroke of luck, I chanced upon a review of Ascendas Reit on Motley Fool. Understanding it to be one of the most popular REIT in Singapore and with analysts providing buy recommendations, I decided to buy 1000 Ascendas REIT in March 2018 at a price of $2.60. With additional cash in my savings account, I decided to purchase 1000 stocks of Frasers Centrepoint REIT at a price of $2.17.

Fortunately for me, my investments in REITs were profitable as I sold Frasers Centrepoint at a price of $2.43 and Ascendas REIT at a price of $2.90 in May 2019. However, I was lucky to have bought the REITs when they were undervalued without having done my necessary research. Given that real money is at stake, I had decided at that point that my future investments would only be backed by thorough research and with a specific strategy in mind.

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