Sept P/L Challenge

September - the notoriously volatile month see the market sell-off since the 1st trading day of the month. The CPI data released yesterday shows that inflation eases to 3-year low. Notwithstanding, the core inflation is still stubbornly above the FED's inflation goal of 2%. Hence, market is now expecting a rate cut of 25 bps instead of a larger rate cut in September.

I started to build my dividend portfolio in August 2024 with the view that a rate cut, albeit small or big, will benefit the REIT. As mentioned in August P/L post, share price of REIT has plummeted under the rate hike environment. REITs especially those with high floating rate loan incurred higher borrowing cost due to high interest rate. The high interest rate also hurts the valuation of the assets under REITs. With the rate cut on the table, REITs are expected to attract yield seeking investors. Lower interest rate also present more appealing opportunities for REIT to acquire yield accretive assets.

Since the accumulation of dividend stocks in August, the dividend portfolio has performed relatively well albeit the market pull back in early September. Dividend portfolio complements well with my growth portfolio as a way of diversification and it helps to cushion the volatility of the growth portfolio. Will continue to add on REITs with strong sponsors and attractive dividend yield when it hits support level.

p/s: Hope @Meta Moo can consider to allow user to set up different accounts with different purposes/investment objectives under one user so that we can track the performance separately.