💰3 Real Estate Dividend Picks to Exercise Barbell Strategy: 9CI,H78,TQ5

Tips: On Thursday, US markets will close for Thanksgiving holiday, and on Friday, will close early, with expected trading volumes remaining low.

• The impact of Trump’s tariff threats may cause the tide to change, with crypto showing some shifts.

• SGX's commercial real estate stocks prove decent dividend to shareholders. $STI.SI(STI.SI)$

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Market recap

The impact of Trump’s tariff threats continues to unfold. On November 25, President-elect Trump announced that he would impose a 25% tariff on all products entering the US from Mexico and Canada. Additionally, he declared that an extra 10% tariff would be levied on goods from China. As a result, most Chinese stocks experienced declines, with the Nasdaq Golden Dragon China Index dropping over 1%.

Noteworthy trends are emerging in the virtual asset market. After facing resistance at the $100,000 mark, bearish traders aggressively moved into inverse Bitcoin ETFs, leading to a drop of over $4,000 in Bitcoin's price on Tuesday, falling below the $91,000 threshold.

$Gold - main 2412(GCmain)$ and $Silver - main 2412(SImain)$ saw a short-term rally. Ukraine launched two strikes against Russia using American-made ATACMS bombs over the past three days. In response, Russia is preparing to retaliate against Ukraine’s use of ATACMS in Kursk. However, Trump’s economic policies may limit the short-term upward momentum for gold prices. Over the long term, the fundamental support factors for gold remain unchanged.

Antifragile: Things That Gain from Disorder

As market uncertainty increases, the barbell strategy is gaining more attention from investors. Applying the barbell strategy to everyday investments can help reduce volatility, enhance the long-term holding experience, and potentially yield favorable outcomes.

The barbell strategy, introduced by Nassim Nicholas Taleb in his book "Antifragile: Things that Gain from Disorder," is designed to combat uncertainty in the market. It consists of one end representing high-risk, high-reward investments, such as stocks and venture capital, while the other end includes low-risk, low-reward investments, such as government bonds, fixed deposits, and high-dividend stocks.

The premise of being antifragile is to effectively reduce vulnerability, prepare for uncertainties, and enhance resilience against risks. In the context of investing, an antifragile portfolio should be robust and non-fragile. Firstly, the stocks held should be reasonably priced or undervalued; if a stock is overvalued, it may face significant price volatility if expectations change. Secondly, the stocks should possess core competitive advantages and good growth potential, enabling them to create long-term value. Thirdly, the portfolio should not be overly concentrated; excessive exposure to a single style or a few sectors can lead to substantial losses if those styles or sectors experience significant fluctuations.

In the current market environment, one end of the barbell may be linked to dividend-paying assets, while the other end connects to growth-oriented assets. This balanced approach allows for diversified asset allocation, enhancing the ability to withstand risks.

Dividend Play: Commercial real estate

In today’s complex and ever-changing investment environment, high-dividend stock strategies have become a focal point for many investors. Turning attention to commercial real estate companies can offer numerous significant benefits.

Strong Cash Flow

Firstly, commercial real estate companies typically enjoy stable and predictable cash flows. This stability arises from the long-term lease agreements often associated with commercial properties, where tenants commonly sign leases for several years, providing the company with a continuous stream of rental income. Such stable cash flow allows commercial real estate firms to easily meet their dividend distribution demands, attracting investors who seek reliable income.

Asset Appreciation

Secondly, the assets of commercial real estate companies often possess high value and significant appreciation potential. Quality commercial properties, such as shopping centers, office buildings, or apartment complexes located in prime areas, tend to increase in value over time. Moreover, commercial real estate companies can further enhance asset value through renovations, expansions, or repositioning efforts.

Clear Business Model

In addition, the business models of commercial real estate companies are relatively straightforward and easy to understand. In contrast to some complex tech or financial enterprises, the operational framework of commercial real estate firms is simpler to analyze, which enables investors to better assess the company’s value and associated risks.

Commercial real estate companies often adopt diversified investment strategies, investing across various geographical locations and asset types to mitigate risks. This diversification helps spread investment risk and improve overall investment returns.

SGX Dividend Play - Consumer goods (as of 20th Nov. 2024)

$CapitaLandInvest(9CI.SI)$ , $HongkongLand USD(H78.SI)$ , and $Frasers Property(TQ5.SI)$ are significant representatives of commercial real estate in Singapore and Asia, garnering substantial attention in the Singapore stock market.

• CapitaLand Investment (9CI): As a global and diversified real estate group, CapitaLand operates across over 250 cities in more than 30 countries. Its portfolio spans a variety of asset classes, including integrated developments, shopping malls, office buildings, hospitality, residential properties, and sectors related to the new economy, such as industrial parks, industrial and logistics real estate, and data centers.

• Hong Kong Land Holdings (H78): Established in 1889, Hong Kong Land is a core member of the world-renowned Jardine Matheson Group, which has British roots. The company's property portfolio in Hong Kong's Central district covers more than 450,000 square meters, and it owns approximately 165,000 square meters of office space in Singapore.

• Frasers Property (TQ5): Headquartered in Singapore, Frasers Property Group offers a wide range of products and services across the real estate value chain. It is listed on the main board of the Singapore Exchange, with total assets of approximately S$40 billion. Frasers Property's multinational operations encompass five asset classes: commercial and business parks, hotels, industrial and logistics properties, residential developments, and retail, with a presence across Southeast Asia, Australia, Europe, and China.

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