Thursday, October 27, 2011

Invest in bonds and Reits now?

What a coincidence! Just when Jim Rogers declare there is a bubble in the bond market, advertisement on investing in Asian bond funds appears in SMRT trains. I believe it is risky to invest in bonds right now. If interest rate is hiked due to inflation, then bond prices will plummet and the investment will lose money.

How about investing in Shopping Mall Reits now? I suspect it is risky too because if the economy takes a dive, then the shoppers will stay at home and shun shopping malls. Retails sales will be impacted and rental rates may even be reduced. This will reduce the dividend yields of Shopping Mall Reits like Suntec Reits.

It is a No-buy for me in both investments.

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