UMS at 78.5 cents liao……….

What sort of direction?

I have none at the mo.

Could be interesting at lower prices

So why 82 cents?

That is assumed that they can maintain the DPU?

Yields have dried up due to 2 main reasons

a) investors chased the yields and prices have gone up
b) the companies are not able to have organic growth to increase the income with the prices

Think the second one is a big issue. NO growth and worse still like Manulife, they grow negatively! This is SCUMbag manager. Bigger portfolio, bigger FEES!

This post has been edited by prophetjul: Jun 19 2018, 08:24 AM

That's always the issue for dividend stocks, when the yield starts to rise and income falls, whether they are able to maintain those yields.

It's a matter of sustainability of the DPU.
The only way CF can be maintained if EPU falls is cost of operations falls, eg interest payment, manager's fees

Who cares?

Go buy 1MDB lah……….

Depends on where you are in your investment life I think.

For me, I was looking at regular sustainable returns with a stable or better currency vs the MYR.
Since I started in 2009, SGX has proven to be rather good in meeting my objectives, especially the SREIts.

My return is approx 14% pa ex currency exchange. In 2009, the SGD was 2.3 MYR. But of course in those days, the SREITs were not so popular yet.
Sabana and AIMS were dishing out 10 to 12% yields!

But all in all, SGX has been good to me.

Are we headed for another recession? The yield curve is at its flattest level since 2007…By Adam Wong on June 29, 2018


You may or may not have already heard that the U.S. treasury yield curve is at its flattest since 2007 – the year before the 2008/09 Global Financial Crisis. Is this a potential sign of things to come?

But before I delve into that, I guess a bit of background information is in order.

What is the yield curve?
The yield curve shows the spread (difference) between the interest rates of short-term and long-term U.S. Treasury bonds. For example, the current interest rate (as at 28 June 2018) for the 10-year U.S. Treasury bond is 2.83% and the interest rate for the one-year U.S. Treasury bill is 2.33%, therefore the spread is 0.5 percentage points.

Usually, interest rates for long-term bonds are higher than for short-term bonds. And rightly so because investors demand a higher yield for locking their money away for a longer period of time, which brings greater risk and uncertainty. In this case, the yield curve is ‘normal’ and slopes upward.

But when the spread between long-term and short-term yields starts to narrow — either by long-term yields falling and/or short-term yields rising — then the yield curve becomes flatter.

If long-term yields become even lower than short-term yields (which obviously doesn’t make sense in the long run), then the spread becomes negative and the yield curve is ‘inverted’ and slopes downward.

So what happens when the yield curve is inverted?
Historically whenever the yield curve becomes inverted, it is a strong signal that the U.S. is about to enter a recession. Have a look:



Source: Federal Reserve Bank of San Francisco

The chart above is the yield curve spread between the 10-year and one-year U.S. treasury yields from January 1955 to February 2018. The grey areas indicate periods of recession. As you can see, every U.S. recession in the past 60 years has been preceded by an inverted yield curve (i.e. the spread goes below zero). Amazing, really.

According to the Federal Reserve Bank of San Francisco economic letter:

“Every recession over this period was preceded by an inversion of the yield curve… and had only one false positive, in the mid-1960s, when an inversion was followed by an economic slowdown but not an official recession.”

And when the U.S. sneezes, the world catches a cold.

Why does an inverted yield curve signal a possible recession?
If investors are optimistic that economic growth will continue for the long term and expect interest rates to rise, many will prefer short-term bonds now (instead of long-term bonds) in hopes of securing a higher yield later. The lower demand for long-term bonds means long-term yields rise faster compared to short-term yields, widening the spread.

However, when investors start to become pessimistic about long-term growth and expect interest rates to fall in the future, many will now purchase long-term bonds to lock in yields before they fall. The higher demand for long-term bonds now leads to long-term yields slowing or falling, narrowing the spread.

When it reaches a point where long-term yields are even lower than short-term yields, we have a negative spread (an inverted yield curve) – a scenario where investors are so pessimistic about long-term growth, they prefer to secure lower yields for long-term bonds now than risk higher yields for short-term bonds.

Therefore, a narrow/negative yield curve spread may signal that long-term investor confidence in the economy may be waning, even though it may still be booming right now.

At the moment, the Fed has been raising short-term interest rates to control inflation in the growing U.S. economy. However, long-term interest rates have been slower to rise which suggests that investors are becoming less optimistic on long-term growth.

The fifth perspective – what next?
It’s also important to note that while the U.S. yield curve spread is at its lowest since 2007, it is not yet negative. Right now, the spread between the 10-year and one-year U.S. Treasury bonds is 0.5 percentage points.

And even if the yield curve inverts, it can’t predict when a recession will happen. The above study by the Federal Reserve Bank of San Francisco noted that a recession came in as little six months to as long as two years. So the music may go on playing for some time.

But whether you decide to use the yield curve as an indicator or not, it’s good to note that the S&P 500 has risen 287.7% since March 2009. As it is, the stock market is looking rather expensive right now with the S&P 500 P/E ratio at 24.57 (as at 28 June 2018), compared to its historical median of 14.69.

The U.S. has been on a tremendous nine-year economic bull run since the Global Financial Crisis. But every economic expansion is followed by a recession — we all know that.

The only question is… when?

How old are you now?

I admire that you want to retire before 40 years young.


By investing in SG does not mean you put everything there. It's about hedging some of your savings in SGD and other currencies. We will not know whther MYR will improve in the next 5 years, will we?

'Low' is a subjective number. What's low for some may not be low for you.

Depends.

If the stock's dividend is going up and up, why not?

Which means that you will never add to the shares that you have in a company in spite of the company continuing to grow and beat the expected performance?

So vice versa, if the company's performance is deteriorating and the POS is going down, you will add? The mean may be during economic recession. Tan tean Boob of I capital uses your method and he has been waiting for the KLSE to correct for the last 8 years! Of course he gets paid his fees while sitting on his arse, twiddling his thumbs!

I have a share in US that the performance improving yoy. Dividends are growing.
The POS goes up with it. So everytime there is a correction due to new share issues and dividends paid, I add. That's the difference of my approach with yours.

This post has been edited by prophetjul: Jul 5 2018, 08:57 AM

There you go again...……...correction. What's a correction? Arent we having one now?
Methinks you are waiting for a Recession like Tan Teng boo.

UMS has dropped from 1.20 to 80 cents. Will you buy?

That's good. But my approach is different from yours.
I buy even if its moving up. Especially when there is spare cash lying around doing nothing.

Your method means that in abull market, you not be involved.

If you are in for the dividend yield like SREIts, why are you so worried about price tanking IF the fundamentals are intact.
It only means that your yield goes up. Unless you are playing on margins.