Despite the seemingly endless US-China trade war, the market prices of REITs have increased sharply since the beginning of the year. If you have substantial holdings of Real Estate Investment Trusts, you need to be careful.
This may sound counter-intuitive, but if you are investing in REIT as an Income Generating Asset for retirement income, you don’t want your share price to go up too fast.
Here are several reasons why:
Your capital outlay needed to generate the same level of passive income will be much higher. The volatility of your investment portfolio will increase and thus reduce your willingness to hold the asset for the long term. Your net worth may drop substantially in the near term, which will affect your overall financial health.
The recent euphoria over Singapore REIT investments is a testament of Singapore’s stability in the uncertain time like now, but it may not end