Parkwaylife Reit has been a stable and consistent Reit, and it is definitely defensive in nature as it is in the healthcare sector, and its rental is pegged to the inflation rate of Singapore.
Since its purchase in December 2009, the share price has been steadily on the rise. This made me purchase more lots in September 2010 to increase my holdings in this strong counter when a slight correction in price occurred then. Everything looks bright until the earthquake, tsunami and nuclear disaster that occurred in Japan in March 2011. As quite a substantial number of nursing homes under the portfolio of Parkwaylife Reit is in Japan, with some of them located within the affected region, the share price took a hit.
Similar to Mapletree Logistics Trust, being a panicky investor, I thought the fundamentals have changed, thus made a decision to sell part of my holdings and reposition my portfolio. However, in unexpected turn of events, within a short span of two weeks after the triple disaster in Japan, its share price suddenly turn and soared to levels before the disaster.
That caught me off guard and I was not able to buy more shares at a lower price than what I have sold part of my holdings for. Hence I just kept the remaining lots that I hold for consistent dividend payouts and further possible capital appreciation.
Recently all the S-Reits have been outperforming all other sectors. This is due to the low interest rate environment currently, making the yield of S-Reits, at an average of 5% to 7%, very attractive. Hence with the sale of Mapletree Logistics Trust at a 3 year high of $1.00, I am looking out for Parkwaylife Reit as well. Soon enough, whenthe share price of Parkwaylife Reit reaches a 3 year high of $2.02, I sold off my holdings, making a weighted average profit of approximately 45%.
My thoughts at that time: I am very hesitant to sell it, as a sale of both Mapletree Logistics Trust and Parkwaylife Reit will mean that my quarterly dividend income will come to a standstill. However, as STI reaches 3,000 points in this turbulent times, perhaps it is a good time for me to reposition my portfolio and realize some profits.
Lessons learnt: Buy and hold strategy has its pros and cons. For strong counters, buy and hold strategy works in my favour, as the dips are usually temporary and soon it will recover from the trough. In fact, the dips present great buying opportunities for such strong counters. This is clearly seen in both my strongholds, Mapletree Logistics Trust and Parkwaylife Reit. After holding on to them for 3 years, the returns has been great. On the other hand, for counters that are weak in fundamentals, especially cyclical counters, buy and hold strategy is a definite no-no. First Ship Lease Trust has been the best lesson learnt. On the cards, there is still Rotary.
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