Wednesday, December 3, 2008


Got this off 'The Edge' Magazine.

It seems like the yields of REITs now are crazily high..up to even 30%.

However we must consider how they calculate these value. It is done by taking the latest dividend in absolute dollars divided by the current share price.

So a stock that was $1 yielding a 5% dividend would be yielding 10% dividend if the stock price drops to 50cents.

Also, before plunging your money into these stocks, you must first do your research on these many factors will affect the future potential of these companies.

For example :
  • Where are the properties in the asset based? Their properties might not be all based in Singapore. Places like China will have a higher risk, as their government might have a sudden policy change, be it tax laws and such.
  • Their gearing. I.e how much debt to asset that they have. This is because in times like this when credit is difficult to get, they might get into trouble if they have too much debts.

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