Portfolio Update - 3Q2018

A way overdue update (supposed to update end-September). Oops!

	Income Portfolio
	Counters	Units	Market Price (SGD)	Overall Value based on market price (SGD)	Allocation
1	Cromwell European REIT	1000	0.864	864	7.28%
	Growth Portfolio
	Counters	Units	Market Price (SGD)	Overall Value based on market price (SGD)	Allocation
2	Alliance Mineral Assets (AMAL)	50000	0.22	11000	92.72%
	Cash and other Assets
	Counters	Units	Market Price (SGD)	Overall Value based on market price (SGD)	Allocation
3	Warchest	1	0	0	0.00%
	Total SGD			11864	100.00%

My stock holdings has taken a hammering, most notably my holdings in AMAL.

Alliance Mineral Assets Limited (SGX: 40F)
AMAL has tumbled from 0.375 as of my last update to its current price of 0.22. This is synchronous with both the sentiment of the market (See STI) and sentiments of the Lithium companies. Add the uncertainty of merger completion between Tawana Resources and AMAL and the Ex-CEO demanding the renumeration to the cocktail and... well you get the picture. I remain confident it will turn around in due time. AMAL has finally started to show some positive EPS in its third quarter (no matter how miniscule that was), and it was already expected they will still be in a loss end of this fiscal year. Fundamentally, next year will be where they show their result.

Cromwell European REIT (SGX: CNNU)
CEREIT has given out dividends for the first time and I have received about $40.30. They intend to issue out 100% of their distributable income up till end of FY2019 as well. Next wave of dividends will be given in March 2019.

Others
My opinion on the market now - Stock market version of Great Singapore Sale. If there is concern for further drop, average down as long as your research tells you it is oversold and the fundamentals of the company is going to persevere.

I'm still unable to start accumulating cash in my warchest at the moment as expenditure remains heavy and whatever income I am getting now is either directed towards offsetting expenses, clearing off debts and borrowings, reaccumulating emergency funds, or preparing for customary marriage. Believe me, I want to bang my head against the wall for being unable to add position to any of my targets! :(

Next portfolio update is expected to be in end-Dec 2018. Marksman, signing-off.

Thoughts on REITs being negative to an economic system?

Readers of my blog likely knows I'm fond of REITs; they offer a place in income investing portfolios and I have a preference to regular realised gains as opposed to purely paper gain despite less sensitivity to the bull. In spite of the rising interest rate environment, I thought with the right screening and selection of REIT, an investor can still benefit just as much as buying stocks of companies.

I come across Donovan's post (link to his financial blog here, and the Facebook group here) in his Facebook group that kind of blew my mind as this line of thought has never really come across my mind. The article links to a news article that Giant is closing off their Vivocity outlet in 2019 (link to the news here).

(Note to Don: Hope you don't mind if I borrow your article for sharing - if by any chances you wish for this to be taken off, please let me know!)

To quote him,

<< REITS -- one of the worst financial innovations in the world >>:

REITS are one of the worst financial innovations in this world. REITS are leeches -- they are parasites sucking the blood of an economic system. This financial engineering hinders entrepreneurship, especially among the youngs. It rewards lazy fat cats and indirectly punishes labour and SMEs. It increases cost of living with every rise in interest rate. How? REITS seek to pass increased borrowing costs from increased interest rates through increased rentals. This heightens costs of living, especially when their malls are all around, that even small businesses will try to peg their prices correlation-ally to the malls. When rise in interest rates are supposed to dampen inflation and suppress inflation, REITS heighten the inflation as they need to pass the interest rate costs to businesses. Their dynamics negatively disrupt progress more than they stimulate progress.

As someone working in an SME, I know about how the lack of resources could hinder a company's progress towards growth more so than say, an MNC.

And then, what about banks? Doesn't the same applies to bank loans or credit facilities then?

Having said that, this will not stop me from having REIT in my portfolio. More likely rising interest rate will deter investing in REIT instead.

Readers, what view do you have towards REITs in this light?