For at least two months now, I had been contemplating an overseas property purchase either in Australia or Japan. It could have been for rental income purpose or perhaps used as an accommodation if one of the kids ever needed it for overseas education. Also, I had a good experience investing in UK property previously having made some money but lost the gains in an ill-informed venture. The most preferred option would have been to invest in Singapore property but ABSD basically destroyed the appetite. This time, my budget was around half a million SGD on a leveraged basis. After a long internal debate, factoring in exchange rate, tenant and liquidity risks, slowly the idea became rather unappealing. That's because I'm looking at yield in the immediate period. My opinion is that good consistent yield that could comfortably offset loans, fees and expenses is difficult to sustain in view of inflation and interest rate stickiness. Hence, I have decided to suspend the investment property dream and turned my attention to other instruments.
As mentioned in other posts, there's a war chest on standby but the anticipated stock market crash has not materialized. I don't think it's good to sit idly and wait although recent bank savings promotions helped to attain helpful returns. Ideally, I would have liked 5% net yield but this was a tough barrier to cross. CPF aside, what else is there to make 4% or more in this situation? I reckoned some risks have to be taken and consider whether to self manage or by third parties. It came down to options trading, ETFs or unit trusts. Maybe I could split among them but in what proportions? No decision yet but one clear thing is that I will only touch a small portion of the idle funds while waiting for a bigger opportunity. Meanwhile, the Fed decision is a sensible one, giving room for a breather and allow the market to recalibrate.
Tip: Chateau Phelan Segur 2016, great rounded texture underlined by soft dark fruits
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