REITs workshop - Part 3: questions and answers

All these three are? Yes. Then we can consider buy the ring. If it's not, since it's fundamentally strong, we can put it on a watch list and then check later to see if the condition to buy is not good. Because we have already done some work checking the fundamentals. So we can put it on our watch list. Of course these things can change. Usually every quarter there is the new, the updated in information. So if not, okay, I put in a watch list and then it's valid forever. No, you still have to check. But at least if it's near a buying point, but not yet there, you can edit in your watch list and maybe check every week or something like that. Okay, so is there any question about this check? No, everything clear. Okay, great. So now I can. It. Okay, so let's summarize what we have learned. Number one, how REITs works. We have seen that REITs are company in the stock market. They use your money and the money of the bank to buy and manage properties. And they pay you at least 90% of the rent that they get as dividends. And they are listed in the stock market so you can buy and sell. And we have seen that advantages compared with the physical properties what and when to buy. We have seen the fundamentals, the four criteria to check. And you have that here, right? So the gearing ratio between you yield and buy over nad. And you have seen how you can check the information for free and easily and the technicals of the chart. And if you're lazy again, just buy the end. And yeah, what I said just now. I also show you the online resources and jarring software that you can use to do your analysis for free. If you are interested in this topic and you want to know more, I suggest you this book. I read a few books about reads and I found that many of them are a little conflicts. But this one is quite, quite easy to understand. So I really suggest this if you, if you are interested to know more. Of course we go much more into details, but still the style of this water is quite simple to understand. And then what else? Oh yeah, this is part of my website. So if you want to know more about this, you have question, whatever, you can send me a message from here. If you want to support me, you also can. But the idea is that yeah, this website I put articles and video about investing and trading. So maybe you can find something here. I also put something about risk and with that I would like to thank you. And you probably know this quote from Warren Buffett that there is this when you don't know what you are doing because you did the research and didn't study. So I think that by coming tonight you learn something new. So I hope that if you want to start your journey in Reids it will be easier now and again if you have questions you can just send them. So thank you very much for your time. I know it's late, you want to eat and if you have any question, please feel free. Yes. Oh for trading it's not a suggestion. Okay. I use poems Philip securities it's not the best platform in the world but I do not use it for trading and also because the fees are much higher than other brokers. But for just investing in REITs where I buy maybe every few months is okay and also is of course regulated by MAS blah blah blah. So they will not run away with your money. Any other question?

Yes, run away with your.

Okay, the thing is this broker I can share something with you that happened to me recently Broker are regulated. They can be regulated and regulated should mean that if something happen they go bankrupt. Your money should be saved. Now I was doing forex trading with a broker regulated in Australia and he went bankrupt like 10 days ago. So I should get my money back in theory but already they start to send emails saying yeah yeah you should but we don't know, we are not sure you know. So they are regulated on the paper. But I mean I will tell you I hope soon if you can really trust them. But it seems that the regulation in Australia is much less freed. That's so many companies even they want to. They prefer to be listed in Australia because it's much easier. So I think that for brokers regulated in Singapore it's pretty safe.

Very nice question, but can you just do it over your bank? Because when I'm DBS over banking you.

Can but I think bank they charge you much more and then I'm not sure about the platform you have. I don't think is convenient compared with a broker. Of course if you don't want to open a broker account you can.

You mean convenient to set it up.

Like for example the broker the platform usually they give you some tools, some additional information and at the same time the commission are lower. And maybe you can have an exposure to many other products that you cannot get from the bank. Like if you want to buy a mutual fund from the bank, really, you know, they suggest you what is good for them, not for you. But with a broker you have the full lease so you can take whatever you want. Okay. The fees of my broker you have two types of account. One is prepaid account and one is not prepaid. So the note prepaid should be linked with something else. But the prepaid usually more or less. Just to give you an idea, if I buy around $9,000 of REITs, you pay around $12 of commission.

I opened a trading account with my bank and they charge 0.8% on an annual basis.

Okay. I mean there are different accounts. Some of them they give you a fix.

So it's quite expensive. You almost go 1% point of your.

And then on top of the commission.

There'S EO costs for some shares going to which cost. Basically the thing where your shares go has a.

Has a cost. Well, yeah, there are some fees like that. When I say 12 is improving everything. So it's 10 plus something something. Then total with all the fees is around 12. With the brokerage that's a one time cost.

This $12 is a one.

Yes, yes. When you buy 12 and when you sell it's 12.

But then for the, for the time roll.

No, no. If you're using a margin account, yes. If you are just using your cache. No meaning let's say you want to buy $10,000 of share and you have $10,000, then you buy and then you don't pay anything. But if you use leverage, so maybe with 10,000 you can buy up to 30,000. When you are buying more than what you have, then it's like the broker is giving you money, lending you money to buy more shares. Then of course you have to pay interest of the rotor.

But where does the virtual share go?

So back in the day I gave paper. Now it's online. It's online but now it's pretty common to have a margin account. But I would use it only for trading, not for investing. Because investing if the objective is to be for a long time, right. You are basically willing to have some means in your network, right? Can go up and down, but you are holding for a long time. Now if you're using leverage, the risk is that you get a margin point mean that the price is going too low. And then you have to top up money. Otherwise the broker wish will sell everything. So that's okay if you trade, but if you are doing long term investing, I would not lose margin. But I think there's something a little more advanced any other there are reads index three one with yes, these, but.

They are the other ETFs.

Yeah, they draw some as compared to some of those.

But they are a reflection of whatever.

Reads they are putting. Yes, I mean you have to check online what is inside those written. But so far I think we have only three. In Singapore they are tracking different indices, but of course you cannot invest directly in the index. So you need to go to India.

Have you compared the dividends or the money event out of these ETFs compared to for example bigger aggregations like S&P 500 or stuff like this in our.

Are you meaning you have in their.

Classifications or you decree the reason?

But okay, the thing is that for REITs, at least for REITs the idea is dividends. Okay. So yeah, I think that even with S and P you get some dividends, but that's not the main thing. The main thing is you can invest in ETF for capital gain. If you know that in the long term an ETF is going up, you can do this dollar cost everything and then you can get capital. That by the way is tax. This is more for dividends. So it's a different type of thing is you just collect in a passive way. These dividends is on top of the capital gain that you can get. So I will not compare this with smp. You can have both if you want. This is something that is very good in Singapore because of the honesty about tax because if you invest in the US then you have the taxes on capital gain. But here you get something with dividends tax free and you get a decent amount like a 6, 7% is quite good compared with what you can get with bonds or things like that. So. Any other questions that my HELA question be raised up?

So price over nav, it's also related to leverage, right? I mean if the leverage is high, then we expect the price to be lower because we know the. The net asset value is actually inflated by the, you know, all the borrowing.

So Dan, this. Well, it's true the price over NAV is something that I share here, but this I would say not the whole story. There are other things that we check. For example, we can check the current liabilities or the liabilities or something else that give you more insights into the leverage of the company. So here of course in one hour I cannot share all the details, but if you are interested I can share also some other things that I check when I invest in REITs.

So we should expect that that time the price of NAV and G ratio between the inverse correlation than.

Well, the G ratio is just considering the. I don't know. I don't know if there is an inverse correlation. Never check. May be interesting to check. Okay. If no other question, I think we can conclude here. And thank you very much for coming. It's the first time I do this kind of workshop and I don't know if you like, maybe you can add more in the future, among other topics. So thank you very much and enjoy your dinner.