would you want to add property sectors to your portfolio?
Updated
Now, everyone has different investment strategies, time horizon, perspective about market, etc. We all know that Warren Buffett is the world's leading value investor yet he invested in many sectors that are tough to analyse like Oil and Gas, shipping, etc
Property sectors in China had its glorious days for several decades but it is over, imo. (at least the next few years). Unless you are looking at the Tier 1 cities like Beijing, Shanghai, Guangzhou, it would be pretty tough to make good capital gain out from investing. With declining population, aging population, families that choose to have lesser children not more , how are the excesses going to be filled up? Look at this counter ,Hung Lung Properties. Had you invested back 20 years ago and held the stock till now, you are losing money due to inflation and note that it is coming back to the support level . Would it goes below? Possible ! Do not think that it must rebound based on any support level and can it rebound for a short few weeks and then crashes again ? Possible. That is the best part of investing, nobody can foretell the future.
But you as an investor can choose which sectors to invest. Property sectors are cyclical and the developers are always at the mercy of the government's plan in terms of land , how it is going to be used, etc.
Now compare it with one of the largest developer in SG- CDL - see the similarities?
Yes, some of these developers do pay high dividends like 6-10% but unless you have cash to burn and is ok for decades not to see your capital appreciate , then maybe you can select these counters.
Think again, if you are in your 20s , yes you can afford 1-2 20 years to see if your prediction is right . But for those who are already in their 40s or 50s , would you want to see these counters perform when you are in your 60-80s ?
Plese DYODD
Property sectors in China had its glorious days for several decades but it is over, imo. (at least the next few years). Unless you are looking at the Tier 1 cities like Beijing, Shanghai, Guangzhou, it would be pretty tough to make good capital gain out from investing. With declining population, aging population, families that choose to have lesser children not more , how are the excesses going to be filled up? Look at this counter ,Hung Lung Properties. Had you invested back 20 years ago and held the stock till now, you are losing money due to inflation and note that it is coming back to the support level . Would it goes below? Possible ! Do not think that it must rebound based on any support level and can it rebound for a short few weeks and then crashes again ? Possible. That is the best part of investing, nobody can foretell the future.
But you as an investor can choose which sectors to invest. Property sectors are cyclical and the developers are always at the mercy of the government's plan in terms of land , how it is going to be used, etc.
Now compare it with one of the largest developer in SG- CDL - see the similarities?
Yes, some of these developers do pay high dividends like 6-10% but unless you have cash to burn and is ok for decades not to see your capital appreciate , then maybe you can select these counters.
Think again, if you are in your 20s , yes you can afford 1-2 20 years to see if your prediction is right . But for those who are already in their 40s or 50s , would you want to see these counters perform when you are in your 60-80s ?
Plese DYODD
Note
while the 10% dividend on HL Property may be tempting, the share price remains depressed and until there is more clarity on the property market and how the CCP intends to prop up this sector, I will shy away from it for the time being.......Note
another month passed and I am still waiting......price has gone down the support line Note
another week passed and am still awaiting for more stimulus news from the government to boost the property sector......there are tons of articles, videos , on social media complaining how sad/bad the market is even after rocking down 40-50% of their purchase price and yet still no buyer. It is truly a buyer's market yet buyers are equally concerned , what if I buy now and the price keeps falling, let's wait, creating a deflationary enviromentNote
In May when I posted this chart, it was around 7.23, three months later, it has went below the support line and is now at 5.38 which was lower than the price in 2003. So, this cyclical industry (which is the worst sector to invest now in China) does has its shortcomings despite the rich dividends... Please DYODDNote
I will be nibbling Hang Lung properties this week
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