Rate cuts are on the horizon - Reprieve for REITs
Inflation has reduced expectations for rate cuts, dropping from seven projected cuts in December 2022 to just two-three by the end of 2024. This outlook remains fluid, influenced by upcoming US inflation data and Federal Reserve guidance. While interest rates may have peaked, the duration of the Fed's rate hold remains uncertain, causing market volatility. There is even a plausible scenario where no rate cuts occur in 2024 if inflation stays higher than expected, though this is likely not the base case with the latest data last night.
Market Carnage With Singapore REITs
At this juncture, most Singapore REITs in 2024 are currently facing multi year lows and have continued to falter as investors expecting the possibility rate cuts to come later at end of Q3. If you thought the price performance we shared back in July 2023 was bad, you hasn't seen anything yet with this latest compilation by The Joyful Investors as of market's close yesterday.
Right now, there are only a small number of REITs that held up the last 5 years and most REITs investors would have suffered much more in capital losses against the dividends collected. If you had been invested in the last 5 years, there is more than 90% chance that the REITs you bought are suffering capital losses.
As we always emphasized, it is not simply a matter of picking the good REITs, but more importantly, knowing when to buy them that makes the difference to the total financial gains.
A Turnaround Is Likely On The Cards?
And like they always say it is always the darkest before the dawn. If one is going through hell, keep going. Press on. Based on our proprietary technical analysis methodology, we do believe that the light at the end of the tunnel is near. Pretty near. Our current cash allocation in InvestingNote Dividend Portfolio is at its lowest of 4% as of yesterday, 15th May 2024. This window of opportunity for us to enjoy significant upside and fantastic yield for Singapore REITs is likely to narrow in the months to come.
Separately, for those who wish to stay in close touch with our market moves to know what is good to buy and what are the ideal entry prices, you may follow us on InvestingNote Portfolio which covers both dividend (Singapore REITs) and growth (US,China) portfolio.
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