Mum retirement portfolio

[KopiKat]

The price when I bought when yielding abt >10%.
My initial capital was $100k

I understand your Yield @ Cost is much higher. But, we're puzzled about your REIT Market Yield. From your data,

REIT (AIMSReit, FraserComm, Suntec) : value-$100k/dividend-$7k

1. Market Value of REITs = $100k
2. Total Dividend from REITs = $7k

This means Yield (at Market Price) of REITs = $7k/$100k = 7%

But, this is not mathematically possible as the current individual REIT Market Yield are,

a) AIMAMPReit = 6.3% @ $1.80
b) FCOT = 5.26% @ $1.535
c) Suntec = 4.74% @ $1.905

ie. none is above 7% Yield @ Market Price

Therefore, as pointed out by 'HitandRun',

The yield for the 3 counters are lower than 7%, so either your market value is understated or your yield is overstated....

[funman168]

Sorry to confuse u guys, did nt chk the actual yield when posting.
I was assuming that it was still trading @ 7%, but in fact the price had move up a lot recently

[NTL]

Sorry to confuse u guys, did nt chk the actual yield when posting.
I was assuming that it was still trading @ 7%, but in fact the price had move up a lot recently

Can't be. Your 1st post state "Currently".

Furthermore, 7% for the Reits portfolio can only be achieved at least 2yrs back. For your Pref Shares, there is never once that it dropped to $50 to give the 10% return as you state.

Your figures are totally wrong. Please correct them.

Thank you.

[flinger]

Hello All,

Appreciate if you could clarify my doubts or confusion.

Is there a reason as to why we have to measure the yield based on "Current Market Cost" instead of " Cost at time of purchase" ?

I understand the D.P.U changes and is not constant, however I measure my yield based on the purchase cost and current D.P.U. and that give me the "current yield". Instead of " Current Market price of stocks"

Am I doing it wrongly? Is so, appreciate if could clarify why my measurement is wrong and why it must be done against current price of stock.

Thank You. Much appreciated.

Sorry to confuse u guys, did nt chk the actual yield when posting.
I was assuming that it was still trading @ 7%, but in fact the price had move up a lot recently

Can't be. Your 1st post state "Currently".

Furthermore, 7% for the Reits portfolio can only be achieved at least 2yrs back. For your Pref Shares, there is never once that it dropped to $50 to give the 10% return as you state.

Your figures are totally wrong. Please correct them.

Thank you.

[mobo]

Hi funman168,

From the way you are articulating your portfolio, it seems you lack even basic 101 knowledge in investment management.

Perhaps you should take a step back and invest some serious time getting up to speed on some basic concepts before talking about managing your mum's portfolio or rebalancing stuff?

Not trying to be rude or sarcastic here, but the markets since you started in 2008 has been on an aggressive bull run and this might have masked your knowledge deficicency since everything is going up.

When the downturn inevitably comes, you could end up drifting in dangerous waters without the appropriate competence to navigate. Very risky especially it's your mum's retirement livelihood you are talking about here.

[CityFarmer]

Hello All,

Appreciate if you could clarify my doubts or confusion.

Is there a reason as to why we have to measure the yield based on "Current Market Cost" instead of " Cost at time of purchase" ?

I understand the D.P.U changes and is not constant, however I measure my yield based on the purchase cost and current D.P.U. and that give me the "current yield". Instead of " Current Market price of stocks"

Am I doing it wrongly? Is so, appreciate if could clarify why my measurement is wrong and why it must be done against current price of stock.

Thank You. Much appreciated.

Let me try.

One good reason for re-balancing portfolio (i.e. sell one and buy another) is either better yield and/or better prospect.

Both should be evaluated base on current market value, instead of historical value i.e. purchased cost. I believe the reason is obvious, no further elaboration needed.

Hope it helps.

[egghead]

Is there a reason as to why we have to measure the yield based on "Current Market Cost" instead of " Cost at time of purchase" ?

This is just my 2 cents...

Assuming you are a buyer in the market, will you be concerned with what the seller paid for his security? Obviously not. As for a seller, what use is your original purchase price in your current transaction with a buyer?

The truth is that what we paid for previously is a transaction in history. Calculating yield base on that number may only be useful for you (serving as fond memory or whatever anchoring purpose). For the market, people only talk about yield base on current price. Can you imagine A and B talking about the same security with different yields because they bought at different price?

[NTL]

Hello All,

Appreciate if you could clarify my doubts or confusion.

Is there a reason as to why we have to measure the yield based on "Current Market Cost" instead of " Cost at time of purchase" ?

I understand the D.P.U changes and is not constant, however I measure my yield based on the purchase cost and current D.P.U. and that give me the "current yield". Instead of " Current Market price of stocks"

Am I doing it wrongly? Is so, appreciate if could clarify why my measurement is wrong and why it must be done against current price of stock.

Thank You. Much appreciated.

Sorry to confuse u guys, did nt chk the actual yield when posting.
I was assuming that it was still trading @ 7%, but in fact the price had move up a lot recently

Can't be. Your 1st post state "Currently".

Furthermore, 7% for the Reits portfolio can only be achieved at least 2yrs back. For your Pref Shares, there is never once that it dropped to $50 to give the 10% return as you state.

Your figures are totally wrong. Please correct them.

Thank you.

I don't think there is anything wrong with that.

For me, I prefer to use current dividend with current price so that I can measure my existing holdings vs what is available currently. Then I can assess if I can improve on my yield.

For funman case, he quoted current value and current dividend, thus when working out the numbers, it doesn't tally. Thus to make it a meaningful discussion, he will need to correct the figures. Else how to discuss?

[pianist]

Any managed portfolio for yr dad? And y your own portfolio, how does it look like?

[NTL]

After some thoughts, I believe this portfolio is all of a fake. As mentioned in my previous post, never once that UOB Pref Shares is able to give 10% yield. The lowest it ever went is around $84, and the yield is only 6%. To give $5k dividend/yr, he will need to put in $83,000 of the $100,000. That leave $17,000 to buy the REITs to give $7k/yr?

How can this be possible?