Why SIA Engineering?
I like the nature of its business, specialised and will be in demand as long as there are aeroplanes to be maintained. Its debt is also very well managed over the years, which shows that the management looks at their top and bottom everyday. No reckless moves seen so far, just joint ventures. To me, reckless will mean acquisitions that result in a debt and its yield lower than the interest cost.
Why AIMS AMP?
Although I am bearish towards the Business Parks sector, the main reason why I bought AIMS was because of its 0.8 Price/Book and 8.5% dividend yield. Although there were some risks that the rental revisions for new leases will be -10%, overall, if you factor that into the yield for expiring leases this year, the yield will reduce from 8.5% to 8%, which is still decent. This purchase is intended to partially make up for the reduction in yields from my Keppel Corp purchases (average purchase price was $8 which translates to a 3.74%).
I can't predict when the market will rock again, but I feel that the market is still considered more "cheap" than "expensive". The Straits Times Index fund's Price Earning Ratio (PER) is 12, which is lower than average (about 16). However, we should also look at the fundamental individual company. If the PER is lower the average, than there is a higher chance for the price to be higher than lower in the short term.
Do I think the economy is bad? Yes, a little, but growth is still positive. Will the market crash? Usually market crashes when there is exuberance and growth, which we don't see now, so it's unlikely to crash. However, anything can happen, and we are very near to the 7-10 year market cycle, so it pays to hold cash. I am still hugging on to a 50% cash 50% investment ratio because my income doesn't grow fast. If you worry about having too little interest on your cash, try any of the following:
1. UOB One 2.43% p.a. for $50k (2 conditions)
2. Bank of China/OCBC 2.25% p.a. for $60k (3 conditions)
3. CIMB 1.0% p.a. for $50k (No conditions)
4. CIMB 0.8% p.a. up to $1M (No conditions)
5. Singapore Savings Bonds (SSB) 0.9% p.a. (1st year, average 1.8%) up to $100k
I use UOB One, Bank of China, CIMB, SSB. Bank of China's service is quite bad so I won't recommend, especially after they reduced the interest from 3.55% p.a. to 2.25% p.a. last month.
Do I think the economy is bad? Yes, a little, but growth is still positive. Will the market crash? Usually market crashes when there is exuberance and growth, which we don't see now, so it's unlikely to crash. However, anything can happen, and we are very near to the 7-10 year market cycle, so it pays to hold cash. I am still hugging on to a 50% cash 50% investment ratio because my income doesn't grow fast. If you worry about having too little interest on your cash, try any of the following:
1. UOB One 2.43% p.a. for $50k (2 conditions)
2. Bank of China/OCBC 2.25% p.a. for $60k (3 conditions)
3. CIMB 1.0% p.a. for $50k (No conditions)
4. CIMB 0.8% p.a. up to $1M (No conditions)
5. Singapore Savings Bonds (SSB) 0.9% p.a. (1st year, average 1.8%) up to $100k
I use UOB One, Bank of China, CIMB, SSB. Bank of China's service is quite bad so I won't recommend, especially after they reduced the interest from 3.55% p.a. to 2.25% p.a. last month.
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