The media reports about consecutive slowdown in the economy and government downgrading outlook forecasts. Do you read into the positive growth figure of 1-2%? or do you read into the consecutive quarters of economic slowdown? Although I am not an economics expert, there are some logical ways to understand what growth figures mean.
Singapore settles for slower growth for rest of decade - May 27, 2016, Business Times
For example, there is a report that the median salary has increased from $3,705 (2013) to $3,770 (2014). At a national level, it means that salaries for each worker had gone up, which may seem like a good thing. However, that does not mean that you will get a salary increment. It also does not mean that your job will always be there for you. In fact, if you are drawing a salary lower than the median and you get retrenched, you are helping to move the average higher.
Similarly, if manufacturing exports are decreasing, it can mean that the value of exported goods had decreased, or the goods are no longer in demand, or there had been a reduction in manufacturing companies because cost-conscious companies had shifted their manufacturing operations offshore. Does it mean that the economy is headed for a really bad time? Tuition centres are definitely sprouting up everywhere. The positive growth and negative growth still add up to a positive growth, which means that businesses are still adjusting to new business models, or the government is simply faking numbers.
The key to knowing what to invest in is to understand what is relevant to you and the world today. Learn relevant skills. Invest in relevant companies. There are certain industries that you know will disappear in 10 years time, some that you don't know or will not. Sometimes I also ask myself whether the mobile phone will be replaced. Does it matter? Will your land disappear? Will the need for food and energy disappear? Does Singapore still need the skills you have?
One thing I am not so sure about is the opening of flagship stores along Orchard. What impact does an Apple flagship store at Knightsbridge Mall beside Paragon have on Paragon? What impact does Uniqlo flagship store have on Orchard Central (a mall whose layout I seriously dislike) and its neighbour Centrepoint? Will crowds be drawn away from hot favourites Ngee Ann City and Paragon?
I am still placing my money in SPH REIT.
1. SPH REIT* $0.93, 5.9% yield. 5.5 cents/share. If you buy 3,000 units, you can expect to get $160/year. Pros: Easy to visit Paragon and Clementi Mall to see how the shopper crowd is like. Occupancy is consistency maintained at 99.9% to 100% for both malls.
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 *.
No comments:
Post a Comment