PORTFOLIO UPDATE!!!
With all the volatility in the market, I have been looking to invest in some stocks or REITs in order to get 10% ROI, with out much volatility and limiting this allocation to less than 10% of my portfolio. The kind of volatility we experiences in the last 6 months did not break me as an investor but I realized that if I do not have steady cashflows, I won’t have money to invest when there are real opportunities in the market. I struggled to find money when the markets were at 15k levels. I had to cut back on my spending and postpone some buys in order to make funds available for investing in ETFs. If I had enough cashflows, I could allocate a certain amount for investing in a period of turmoil. So here are a few Investments I will be making in coming months.
1] REITs
Brookfield and Embassy REITs have given great returns in the past 2 years. When office spaces were completely empty, they did suffer but since the unlock, we have seen people flocking to offices and hence their rental income has gone up. They have also leveraged their existing properties for investing and building more office spaces. They have given a <= 6% returns and upto 5% capital appreciation. 5% Capital Appreciation is quite healthy for a commercial property. Even when markets were in turmoil due to inflation and supply chain and war related problems, the prices have gone up, providing some sort of hedging to a market meltdown. Hence a 3% allocation will provide enough to reinvest that money into more REITs or high growth stocks, etc.
2] REC
This is a very well know company for giving high dividends but many people argue that this does not provide any capital appreciation, which is very evident from their technical charts. The price is in a 80rs range from 80 to 100. So if one wants capital appreciation and dividend income, buying it in a 80 to 100 range will be the best level to buy and since the price is in a tight range, the stock periodically provides great price points to invest more. A dividend yield of 11% with an ROI of 40rs if bought at 90s gives a overall return on <45%, quite enough to make further investments in high cashflow investments.
3] FD OR CORP. BONDS
I know this is a very unconventional and bad investment advice for or by any young investor but with interest rates on a rise, we can soon see higher than inflation FD rates closer to 7% for a short period of time until they come back down. It goes without saying, that Bond investments need to be significant for making any worthwhile return, so a one can explore options on Wint wealth or Kotak Cherry for the same.
The allocation for these investments won’t be more than 7% of my total equity investments.
I welcome any views or suggestions.