This content was created by Alberto Costa. This content was uploaded by Alberto Costa. This is a YouTube video titled "+11% on a REIT investment in 6 month by Redart" created on April 9, 2019. The video features a monologue by Redart discussing a personal investment in a Singapore real estate investment trust (REIT), explaining the reasoning behind the investment, the entry and exit points, and the overall return on investment achieved.
Chapters
Hi, welcome to this new video. Today I want to discuss with you a recent investment that I took. And this way you will also see more or less what is the reasoning behind a long term investment and what is the difference compared to a trade. Here you see the chart is Ascenda street is a real estate investment trust in Singapore. So we are in the Singapore market now. And just to give you an idea of this trade, sorry, of this investment, this REIT is quite strong. So fundamentally it was good. I don't want to go through the analysis of the fundamentals, but I decided to buy around here around September last year and then I took profit around here at 286. And what I want to discuss with you is why I decided to enter here, why I decided to take profit there. So let's first check the entry. The entry was around this level. Why that? Because first of all there was a strong support that you can see here, let me show you. The support. Is around here, you can see it was touched many times. So this point here where I enter at 265 is not too far from the support. But why did I decide to enter there? Well, the reason is that they were having dividend soon. If you know, with REITs one of the main objective is to collect dividends as passive income. So I decided to enter here because I was not too far from the support and I would have been able to collect my dividends. Of course, if I wait the price to go down, I would have entered at a better price, but I would have lost the dividends. And by the way, Singapore are tax free. So I enter around here and then I was able to collect the dividends here and also here. And then I was holding my position until I saw the price here, it was going up and hitting this level. Now why this level was important here you cannot see because with this software I can only have three years of data. But I can show you with my platform, the one I use for investing in the Singapore market, that if we go back to 10 years and this is the same counter, you can see that this level was basically the highest in 10 years and it was touched at least two times. So what I did well, when the price was approaching this level Again at 286, I placed a limit order and I took profit. That's what I did. So around here again I took profit. And what happened after that? Well, the price went up, it went up again. And after that, actually today there was a big drop and the drop, if we look at the numbers here it was 238%, so 0.07. Quite a big drop. I want to highlight this for one reason, because usually people may feel that they have missed an opportunity. I discussed this in previous video. If you follow your rules, it's fine. You will never be able to consistently catch the top when you want to sell or buy at the bottom. So to me selling here was good enough. Even though the price was going up later, I didn't really feel bad. Now what I will do, I will wait and when the price will go down enough and the yield is attractive again, I will buy again. Because this is a great trade, fundamentally is very strong. Let's review now the trade, okay? So you can understand also how to analyze the result entry price. As I said here, it was 265. Okay, you can see here I enter in September last year. This is taken from my trading account and I bought at 265. Okay. When I exit the price was 286. You can see here I sold these shares 3400 at 286. And when did this happen? In March, end of March this year. So more or less six months. Now as I said, I also collected dividends on this REIT and it happened twice if you remember the chart. So one time it was 0.0725. These numbers are in Singapore dollars, of course, because it's a Singapore reit and this is related to one share. And this is what happened here. They paid in October last year. And. And if you sum this, you will get this number and then they pay again in November. Okay, what is the amount is the year and then if you sum, you get this. So the total of the dividends I got is this. So what is the meaning of this? I buy at this level and I sell here. So this is the capital gain plus you get the dividends. So this is how much you make for share. If you divide this by the price for share, you get your ROE return on investment. That in this case it was around 11% 10.9. Now I know I made a video in the past saying that ROE in my opinion is not a good indication for trading. But for investment is different. Actually it's return on investment, right? It's not return on trade, it's not rot. So why is it so? Because in investment usually you don't have a stop loss for long term investing. So it means that you put your money and then virtually this money can go to zero. So the real risk you have is actually to lose the whole Capital and this is telling you how much you made on that portion of money that you put at risk. In theory you should diversify, but in theory this could be equal to your whole capital. For example, if you buy an ETF and you just place all your money there and you want to wait for capital gain you're risking technically your whole capital, it will never go to zero. Like if you buy the ETF truck in the S and P, I think it's virtually impossible that it goes to zero. But that's the worst case, right? So here you see this number is nothing crazy. It's not the 2, 3, 400% that you see sometimes. Why? Because this was made with a cash account, meaning I didn't use any leverage. And why is that? So leverage, in my opinion, and I shared this in previous videos, is good for for trades. Why? Because you need to have leverage in order to buy shares that allow you to risk what you wanted. It doesn't mean that you are risking the amount of money that you buy because you have your stop loss. But here you don't have a stop loss. So actually if you use leverage for long term investing, it may be that you lose everything, right? So you need to be careful about the difference between investing and trading and understanding the risk of using leverage in the two cases. So I'm quite happy of this number is again nothing crazy. But in six months 10.9% considering that in Singapore the dividends are tax free is quite good. And what I really wanted to do is to take you through the process of how I exit this long term investment. Because one of the hardest thing in my opinion is to know how to exit for this kind of investment. For trading is easier in a way because you have your target profit, you have your stop loss so you can control better what is going to happen. But for long term investing is sometimes not easy to understand where to exit. So I shared this in a video how to exit for long term investing. This is one of the strategy I use selling near a resistance point and wait for the price to go down again and to offer me attractive yield. Yield is the dividends you get over the price so that it will be convenient for me to buy again to collect dividends. So with this I would like to thank you for watching this video as usual, if you have any question, please write me a comment. I'm more than happy to reply and like the video if you like, of course and subscribe to the channel to be updated when I release other videos. And as usual, see you next time.
