Comments on: The Dividend Myth of REITs

By: Martin Lee

Martin Lee — Fri, 09 Dec 2011 04:33:39 +0000

Dear Peter,

A lot of controversy over the REIT. Don’t find it enticing.

By: Martin Lee

Martin Lee — Sun, 04 Dec 2011 12:57:04 +0000

Dear Mark,

With all due respect to the author, she actually included a table that shows the profit that takes into account the capital appreciation and all the factors. Unfortunately, this is not shown in the online version of the article (She’s more than competent in maths, she is a CFA holder).

Someone reproduced it though:

http://www.investmentmoats.com/money-management/reit/the-reit-myth-busted/

By: Peter

Peter — Sat, 03 Dec 2011 03:10:38 +0000

Hi Martin,
K-Reit just issue right issue at 85c. Could advise if this is worth investing? Thanks.

By: Mark

Mark — Fri, 02 Dec 2011 04:51:53 +0000

I feel that the article is very one-sided and is written by someone that is weak in maths and knows very litle about the market.

she quoted the CMT example that one will have a negative cashflow if all the dividends and rights are counted. But rights can be sold. If you have sold your rights, you would certainly get back your sum. Even if you have subscribed to the rights, you can still sell off the additional shares in the open market and gotten your money back. For me I will use profit to measure the success of the reits and not cash flow. Eg
Profit = (current price of share * units held + dividend) – (initial IPO price + cost of all the rights).

By: James

James — Thu, 01 Dec 2011 01:05:24 +0000

For good stock dividends play, it’s good investment for long term of min 10 yrs, provided the yield is more than FD’s interest rate & the dividends are re-invested into the same stock for yield compounding.

Rights issue at discounted price is also good for re-investment into the same stock for the same yield compounding over time. This is what is known as you get paid for purchasing the stocks by getting the regular dividends & overtime the compounded yield can work out to be several 100s% interest rate as compared to FDs interest rate or even capital growth of stocks which don’t pay any or very little dividend. A study has been done on this in USA over 10-100 yrs.