Persistent high inflation of everything from food, transport, housing and utilities are essentially diluting value from all walks of life. Many have blame the war, supply chain issues and pandemic for this problem. However, I believe the truth lies with the record monetary stimulus the world had ever seen.
Warren Buffett recently reiterated that in the environment of high inflation, the best thing one can do is to be exceptionally good at something. The best doctor, lawyer or barber will still be able to charge prices above inflationary rate due to the scarcity of such skills. The same can also be said in investing for companies that are the best in their fields.
As a large portion of the SRS funds consist of REITs and so the question to ask is whether REITs will continue to do well in a high inflationary environment. The most important factor lies in the skill the REIT manager.
The exceptional REIT manager will be able to first increase revenue through careful planning of tenants mix that position rent to scale much faster than inflation. Second, the manager will also carefully devise capital management strategy to cater for all likely interest rate scenarios.
In a difficult environment the skill of the REIT manager will shine through resulting in better DPU growth compare to their peers. This skill similar to a good doctor will be worth paying a premium for exceptionally well managed REIT.
SRS Fund Portfolio
The SRS fund portfolio remains stable despite market volatility especially in foreign markets. The fund added additional units in Mapletree Com Trust as well as HS Tech ETF during the month. Q2 dividend started to trickle in starting with $540 from DBS. The bulk of dividend will be receive in May and June which should easily exceed the amount received in Q1.
LATEST POSTS
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The SRS Fund Aug 2023 Update
In 2022 I made a decision to cease contribution to the SRS Fund in order to avoid paying any taxes upon withdrawal. I was wrong and short sighted for that matter.
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The SRS Fund Jul 2023 Update
Recently I decided to made some changes and separate my monthly article with the SRS Fund update. This change enable me to better focus on the fund itself as well as the underlying companies.
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Tuning Out the Noise
There are simple too much news and data out there in the investment world for an investor to consume everyday. To become an effective investor, one got to tune out the noise, that is to differentiate what is useful and what is not.
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The Revenge Travel Boom
When Covid hit major economies in 2020 a group of companies like the FANNGs got a major boost due to the physical lock down of cities all over the world.
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Worst Investment Ever
I made this investment at the stage when the biggest mainland property firm China Evergrande defaulted on its offshore debt. From then on the property sector took a dive bringing many property related companies stock to new lows. Sensing an opportunity I did some research and zoom in on this company called Sunac.
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Mind Changing Facts
When the facts changed a flexible mind should have the ability to accept the changed facts and adjust accordingly. For some time now, it has become clear to me that the low interest rate environment that we enjoy for the past many decade has come to an end.
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