REITS with good yield and low price

Here are some REITS with good yields and low price to book ratio:

                   Price    Dividend    P/BR
                    31/1     yield
Allco REIT         0.67      11.7%      0.42
Mapletree REIT     0.93       7.9%      1.10
McQuarie Prime     1.05       7.0%      0.91
Suntec REIT        1.50       6.7%      0.73
K-REIT             1.46       6.5%      0.73

A P/BR ratio less than 1.0 means that the price is lower than the book value of the assets. Some of the prices have moved over the past few days. (Note: I have personally invested or plan to invest in some of these REITS).

Buying a Shield plan

Dear Mr. Tan,

Do you have any advice on how to choose between the various Medishield plans offered by CPF and the insurance companies? Which is better choice?

REPLY

You can read my general tips in this FAQ:
http://www.tankinlian.com/faq/shield.html

Higher productivity in insurance sales

Mr. Tan,

It seems from your postings, that you are against insurance agents. If there are no insurance agents, how will the insurance company get its sales?

REPLY

I am in favour of insurance agents who play a useful role by offering good value products to customers for a fair rate of commission.

I am against insurance agents who explot consumers by offering poor value products, so that they can earn a high rate of commission. They are trained to find ways of pushing these products to a unsuspecting consumer.

I hope that the selling of insurance can achieve the same level of productivity as the selling of shares. The commission rate earned by stockbrokers has reduced by 70% in recent years. The stockbrokers are able to make an adequate income on a reduced rate of commission by working more efficiently and by handling a larger volume of sales. They are able to bring down the transaction cost for consumers.

It is possible for insurance agents to find a more efficient way of marketing and similar value to consumers.

If insurance companies offer good value products, consumers will buy the insurance products willingly. There is no need for insurance agents to spend a lot of time to push these products to them.

Selecting Blue Chips

Dear Mr. Tan,

In your blog, you mentioned to select 5 to 10 blue chips and invest $10,000 to $20,000 in each share. I wish to ask which are the 5 companies you feel has greatest value and potential? I understand this is in your perosnal capacity and that you are actually doing me a favour if you reply.

REPLY

I assume that, in a perfect market, the prices of each share reflects its future profitability. You only need to be concerned with:

a) Buying blue chip shares - as they are more stable
b) Have a certain degree of diversification.

I do not have any insight into which of the 30 shares in the STI index that I should invest it. I just chose one from each sector, say bank, property, conglomerate, media, transport.

Divident yield on STI Exchange Traded Fund

Dear Mr. Tan,
Does the STI Exchange Traded Fund pay out a dividend? Is the dividend yield good?

REPLY

My stockbroker has confirmed that the STI ETF gives a dividend every six months. The total dividend for the past year is 10 cents, representing about a 3% yield on the current share price of $3.20.

Apart from the dividend yield, you should be able to enjoy an appreciation in the share price, as it tracks the STI index.

Redeem whole life policy?

Hi Mr. Tan,

I had bought a whole life policy in 2000 covering sum assured OF $50,000. I'm paying about $850 per annum. It going to break even in about 1 year's time. Is it advisable to redemn the policy and buy a term policy instead?

REPLY

Read this FAQ and see if it answer your question:
http://www.tankinlian.com/faq/exist.html

Call and Put Options

Dear Mr. Tan,

I need your advise on how to purchase Options (ETF) for STI index. If I buy OPTIONS, is it subjected to PUT/CALL ? If I invest regularly for 20-30 years, can I buy OPTIONS that do not expire? Is there any difference between buying Options thru broker & via ONLINE website?

REPLY

I am not able to advise on short term investments, such as options. Generally, options are costly and are intended for short term speculation or hedging. All options have an expiry date that is usually three months. It is not suitable as a long term investment.

Generally, you should avoid investing in financial products that you are not familiar with.