Fundamentals of Investing: Investment Opportunities and Recommendations

This article discusses investment opportunities and recommendations for generating higher returns from investment. It covers property investment, equity stocks, and REITs. The article provides a portfolio that can help in improving the level of income and reducing risk from investment. The portfolio can generate a total annual return of SGD 32,901.95, while the total value of the portfolio is increasing due to the rising values of property in Singapore.

Running head: FUNDAMENTALS OF INVESTING
Fundamentals of Investing
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Introduction:...............................................................................................................................2
1. Identifying the investment opportunities presented to Mr. M:..............................................2
2. Recommendation provided to MR. M:..................................................................................3
Conclusion:................................................................................................................................5
Reference and Bibliography:......................................................................................................6

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Introduction:
The overall assessment aims in detecting the level of investment opportunity, which
could allow Mr. M to formulate a portfolio that can generate higher returns from investment.
Moreover, the overall usage of equity stocks, REIT, and Property investment is mainly used
for drafting the portfolio, which can generate higher returns from investment. Furthermore,
the evaluation also helps in depicting the level of investment on each class that needs to be
conducted by Mr M. for increasing his profits from investment.
1. Identifying the investment opportunities presented to Mr. M:
Investment amount SGD 8,000,000
Particulars Per sqft Price per sqft Amount Expected rent
Residential
Condominium 1,200
SGD 3,200 SGD
3,840,000
SGD 8,500 SGD 9,800
Commercial
Office 1,200
SGD 3,000 SGD
3,600,000
SGD 9,500 SGD 12,500
The table directly indicates the level of investment and return, which can be provided
by the property investment. The investment in both properties directly depict the level of
returns, which can be generated from the investment. However, the investment in
Commercial office will provide higher returns on monthly basis in comparison to the
Residential Condominium. Furthermore, the portfolio rated for Mr. M can accommodate both
residential property and stocks, which can help in improving the level of income and reduce
risk from investment. Deng and Wu (2014) mentioned that accommodation of both shares
and property mainly allows the investor to maximise the level of income from investment.

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Particulars Current
share price
Net Book
Value
PB Dividend yield
(%)
Avg Traded
Volume
Dynamic Globe
Ltd
15.8 10.9 1.45 1.30% 25mn
Jedi Star Ltd 2.03 2.65 0.77 2.50% 1.2mn
C-REIT 1.7 3.3 0.52 3.50% 10mn
L-REIT 1.5 1.35 1.11 6.85% 0.9mn
The data depicted in the above table directly indicates the level of Price to Book
Ratio, which is used for detecting the level of investment, which can be conducted in the
stock. Therefore, with the calculation and the dividend yield the overall stocks can be section
for the portfolio, which can generate higher returns from investment.
2. Recommendation provided to MR. M:
Investment Per sqft Price per sqft Amount Return
Residential Condominium 1200 3200 SGD 3,840,000 SGD 109,800
Commercial Office 1200 3000 SGD 3,600,000 SGD 132,000
Mortgage payment SGD (90,000)
Return 2.04% SGD 151,800
The calculation conducted in the above table represents the overall investment, which
can be conducted on residential plot for Mr M. both the property is taken into consideration
for investment, as it will generate adequate returns on monthly basis. The use of mortgage
system is used for the accommodation of Commercial office, which can reduce the level of

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mortgage payment and generate a total of 2.04% on yearly basis. Haila (2015) stated that
with the use of property investment directly allows the investor to increase the value of
property and generate returns from rent, which helps in securing the overall investment.
Investment Current share price Number of Shares Amount Return
Jedi Star Ltd 2.03 1,206,800 SGD 2,449,804 SGD 61,245
C-REIT 1.7 1,005,997 SGD 1,710,195 SGD 59,857
Total Investment SGD 7,999,999 SGD 272,902
The above portfolio mainly depicts the level of income, which can be generated from
investment, as it helps in maximising the profits from investment. On the other hand, the
calculation conducted in the above table directly represents the exposure, which has been
conducted in Jedi Star Ltd and C-REIT. Both the stocks selected for investment has the
lowest Price to Book ratio, which helps in minimising the level of risk from investment. The
investment of 1,206,800 shares needs to be conducted in Jedi Star Ltd, while only 1,005,997
share needs to be purchased in C-REIT.
Particular Value Amount
Return from investment 3.41% SGD 272,902
(-) Inflation rate 3.00%
Actual return from investment 0.41% SGD 32,901.95
From the overall evaluation, it can be detected that total returns provided from the
created portfolio is at the levels of 3.41%. However, the inflation rate is eroding the benefits
provided from investment, which is only totalling the return from investment at the level of
0.41% for the fiscal year. Therefore, from the investment of SGD 8 million in property and

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stocks the organisation is getting a total annual return of SGD 32,901.95, while the total value
of the portfolio is increasing due to the rising values of property in Singapore.
Conclusion:
After evaluating the portfolio data, it is advisable to Mr. M that he should utilise the
drafted portfolio for tapping into the rising property market of Singapore. The adoption of
drafted portfolio might eventually allow Mr. M to improve the level of income from the
investment by 0.41% on yearly basis after deducting the inflation rate of Singapore. The use
of mortgagee has mainly helped in increasing the total value of investments, which can be
conducted in property. Therefore, Mr. M with the drafted portfolio could eventually generate
higher rate of return from investment over the period of time.

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Reference and Bibliography:
Deng, Y., & Wu, J. (2014). Economic returns to residential green building investment: The
developers' perspective. Regional Science and Urban Economics, 47, 35-44.
Haila, A. (2015). Urban land rent: Singapore as a property state. John Wiley & Sons.
Ho, K. H. D., & Rengarajan, S. (2017). Industrial Real Estate Market Dynamics in Singapore:
A VAR Approach. International Real Estate Review, 20(4), 417-450.
Nanda, R., & Rhodes-Kropf, M. (2013). Investment cycles and startup innovation. Journal of
Financial Economics, 110(2), 403-418.
Reddy, W., Higgins, D., & Wakefield, R. (2014). An investigation of property-related
decision practice of Australian fund managers. Journal of Property Investment &
Finance, 32(3), 282-305.
Uphoff, E. (2018). Intellectual property and US relations with Indonesia, Malaysia,
Singapore, and Thailand. Cornell University Press.