The Weekly Nibble: Would You Like Some REITs to Go With Your Blue Chips?
Here are some of the more thought-provoking articles that had appeared in the Motley Fool Singapore’s website over the past week.
In this article, my Foolish colleague, Stanley Lim, looks at why we should not fall in love with our stocks (one of the reasons cited is that by becoming attached to a particular company, we would become blinded and won’t be able to recognize its flaws) and how we can avoid being overzealous about them.
Many investors cringe at the sight of companies with high debt. However, there are some advantages in investing in such companies. For one, the use of debt can increase the overall reward since it is cheaper than equity. Some companies also borrow money just to maintain relationships with banks. When crunch times appear, such relationships will come in real handy.
3. On Real Estate Investment Trusts (REITs) and blue chip stocks
A REIT works by owning a number of property assets, which are bought partially by the money supplied by unitholders. In return for the capital, unitholders get rental income, in the form of regular distributions.
In Singapore, there’s an index called the SGX S-REIT Index, which is made up of 28 real estate investment trusts (REITs), six stapled trusts, and three property trusts. The total market capitalisation of the index is S$73 billion and the average dividend yield is slightly less than 7%. To know more about the REITs and trusts in the index, you can check out the articles here and here.
Just like REITs, some blue chip stocks can also give you a regular income through dividends. To get to know the top 10 stocks with the highest dividend yields among the 30 Straits Times Index (SGX: ^STI) components, head here. But remember, don’t fall in love with any of them!