A short YouTube commentary (creator: Alberto Costa) about market recoveries after the coronavirus-induced drop. The speaker—filming from Italy—reviews three areas: the US market (S&P recovery), Singapore REITs (example: Ascend US REIT) and the Chinese market (large parabolic move). He advises caution: although markets are back to or above pre-crisis levels and momentum is bullish, now is not an ideal time to buy; wait for a retracement. He also notes a personal dividend-yield threshold for REITs (about 6%).
Questions this video answers
Alberto Costa.
July 22, 2020.
Italy.
Around 6% or more.
Chapters
Hi guys, welcome to this new video. I'm still in Italy so I'm still not able to upload video as I would like to do because as I explained last time, the connection here is still slow. But I want to discuss with this quick video what is happening in the market right now. First of all, let's look at the S and P. So the US market, as you can see after the big drop we had with the coronavirus here in around March, the market basically recovered. You see, we are basically here at the levels of before the crisis, I would say. And currently the problem is that there is this gap that you can see here. So the price is close to that area and I will wait to add more. So good news, the market is going well, is going up. I hope you accumulated some shares during these last months because the prices were pretty interesting. And let's see if this will continue in a new uptrend that is going even higher. But for now I would just wait. Similar situation on my second market, that is the Singapore Real Estate Investment Trust and I will show you an example is Ascend US REIT that I've been accumulating. This is a very solid REIT and you see a similar pattern. The big drop here and then the price basically recover. So we went to around 230 here, to 330, a big increase again even more than US market for REITs. Now I don't think is the right time to buy, especially when you have this situation. Why? Because remember, you buy REITs at least I buy REITs for dividends. So when the price is too high, the yield, so the amount of dividends that you get compared to the price you pay is not good enough. To me I would like ideally 6% or more. So again, good news if you accumulated shares. But now wait, finally Chinese market, same story, even more extreme actually. Like if you look at this ETF that I have in my long term portfolio, you can see that there was a huge, a huge jump in the price here. And definitely now is not the right time to buy because usually when you have this kind of parabolic increase, you want to wait. If you have shares, you can consider selling something. Actually that could be a good idea. But definitely not buy now. So just to recap, US market, Singapore REITs and Chinese market, all of them are doing very well, they are already recovering or they have basically in this case done even better than the levels we had before the crisis. But I think for now, especially in a long term perspective is not the right time to buy. We should wait for a retracement before doing that. But the good news is that the bullish momentum seems to be there. And let's see for how long it will wait. And with this, I will stop this video. Thank you for watching. See you next time.
