What will I buy with $3000 (Apr 2016)?

STI has been hovering around 2800 points and it's quite safe to buy income generating stocks at 5% yield or higher when you are not caught in an upturn wave. When income is generated, you don't really need to worry about whether the market is good or bad. It's similar to a hawker centre set up -- just because 99 stalls keep changing owners because business is bad doesn't necessarily mean that the 100th stall that constantly enjoys long queues of customers will be unable to make money.

1. SPH REIT* $0.95, 5.7% yield. If you buy 3,000 units, you can expect to get $160/year. Pros: Rental from Paragon and Clementi Mall are expected to be stable despite reports about retail shops closing down and high vacancy rates in a handful of Orchard district retail malls. The reasons why the units are vacant are probably why Paragon enjoys 100% occupancy -- location, location, and location.

2. Boardroom* $0.59, 5% yield. If you buy 5,000 units, you can expect to get $150/year. This company has 3 business areas: Secretarial services, depository services, business solutions. There are many similar companies (at least 50 companies) offering similar services except for the depository services where they help CDP with the shareholders registry. Whenever you buy shares, it has to be recorded somewhere, and the service is provided by Boardroom. If you look at its financial report, it has been consistently operating at positive cash flow. Profit margin is around 10%. The downside is that there is very little float in the public market (just 15%) and you will be just waiting for one of the 400+ shareholders to sell their shares to you. Limited upside.

Read the financial statements before putting your money on any stocks.

The above is by no means a fail-proof recommendation to buy. Stock prices fluctuate and buyers need to be aware of the risks.

The writer owns stocks marked *.