Wednesday, September 4, 2019

How Dividend Warrior Transformed His Portfolio In 2016 Bear Market?

Low Interest Rates Are Here To Stay
My portfolio tends to evolve after every deep market correction as I find ways to improve on it. During the last serious bear market in 2016, I divested those weaker, 2nd-tier REITs such as AIMS AMP, First REIT and Cache Logistics. The raging oil price crisis in 2016 gave investors the perfect opportunity to go big into top-tier REITs as well as the 3 local banks because their valuations were rather beaten down. Too much irrational fear over the banks' NPL exposure from the O&G sector back in those days. 

So, I made the transition, believing that I would reap solid returns in the future as it is almost impossible for the US Fed to hike rates up to 3%. Forward-looking is important. Thanks to my lucky stars, my bold decision was proven right as the market rallied beautifully in 2017. By the end of 2017, my portfolio transformation was pretty much complete, a combination of banks and quality REITs. Dividends and growth.

Remarkably, those top-tier REITs with strong competent sponsors like Mapletree, Frasers, CapitaLand, Ascendas and Keppel kept growing their DPU and the 3 local banks had since increased their dividend payouts. Even today, all the Mapletree REITs remain resilient in the face of escalating US-China trade war, hard Brexit and increasingly violent Hong Kong riots. I intend to repeat this formula shall the market experience such a steep decline again.

If you are interested, you can check out how my portfolio evolved in 2016 over here and here. Got picture got talk, right? Hahaha! ^__^

"To improve is to change, so to be perfect is to have changed often." 
~ Winston Churchill 

1 comment:

Frederick Seah said...

Hi Dividend Warrior,
What do you think of Keppel DC REIT? Is it a good time to divest and realise profit?
It had grown way above its book value recently. I'm expecting to see a slight correction over the next few months.