Hanboy73 wrote a post · Oct 9 09:37

Mooney Tip - Arbitrage Opportunity

With the rise in property prices, most of us would be sitting on healthy unrealised capital gains or home equity capital. This presents an excellent opportunity to refinance on a larger loan or extract a home equity loan, especially against the backdrop of lower interest rates.

A quick check on the prevailing market shows that we can possibly refinance on fixed rates of 2.2-2.5%. Therein lies the arbitrage opportunity when we deploy these funds into a relatively safe and high yielding instrument like the S-REITS.

Whilst the sector has already enjoyed a nice run-up, one can still get decent dividend yields of 5-6% on a properly constructed portfolio of S-REITS. With the tailwind of lower interest rates behind us, there is also the added bonus of potential capital appreciation as yields compress. Hope that you find this tip useful!

Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more

Translate

Report

2457 Views

Comment

Hanboy73

Old school fundamental investor with a knack for identifying stock price catalysts and capitalising on short term trades

26Followers

7Following

105Visitors