Fundamentals of Investing - Investment Opportunities and Recommendations for MS B

This article provides investment opportunities and recommendations for MS B in the real estate and REIT industry in Singapore. The portfolio includes both Residential Condominium and Commercial Office, which helps in generating high level of returns. The article also discusses the financial viability of the portfolio and the use of dividends in formulating the portfolio. The subject is finance and investment, and the course code and college/university are not mentioned.

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

FUNDAMENTALS OF INVESTING
1
Table of Contents
1. Detecting the opportunities that is been presented to MS. B:................................................2
2. Providing relevant recommendation to MS. B:......................................................................3
Reference:..................................................................................................................................6

FUNDAMENTALS OF INVESTING
2
1. Detecting the opportunities that is been presented to MS. B:
Real Property Type Location
Size (sq.
feet)
Asking Selling
Price ( psf )
Expected Monthly
Rentals
Residential
Condominium High End
Exclusive Orchard
Road vicinity 1,200 S$ 2,800 $ 7,000 to $9,500
Commercial
Office Grade A
Cecil
Street/Robinson
Road vicinity 1,200 S$ 2,800 $ 7,000 to $9,500
From the overall evaluation of the above figure the investment options presented to
MS B can be identified. The investment options help in identifying return, which could be
generated from investment and support financial obligations of MS B. Adequate demand for
property in Singapore has grown, which might allow investors to generate higher returns
from investment (Benton et al. 2017). Therefore, adequate portfolio could be created for MS
B for supporting her financial obligations and improve her return generation capacity.
Security
Last
Transact
ed
Avg.
Daily
Vol.
Traded
Mkt.
Cap. (in
$ billion)
52 Weeks
Price
Range
Price
Earnings
Ratio
(PER) E.P.S
Current
Dividen
d Yield
Net
Book
Value (
$ )
Gearing
Level (Debt
to Total
Assets)
Price ($ ) ( $ ) ( $ ) ( % )
Crystal World Ltd. (CWL) 12.8 20 mn 12.8 7.20 - 13.20 16 0.8 1.5 9.8 23%
Jade Inter- national Ltd. (JIL) 1.8 1 mn 0.85 1.50 – 4.50 9 0.2 3.5 2.15 65%
F-REIT 2.9 2.2 mm 1.8 1.20 – 3.20 n.a. n.a. 4.5 3.2 32%
P- REIT 1.5 22 mn 8.7 1.30 – 3.50 n.a. n.a. 6.75 1.3 43%
The investment scope is presented in above figure, which could be used by MS B for
improve her return generating capacity. The shares are mainly related to property and REIT,
where adequate closing price, dividends and other information are provided, which are used
in the portfolio creation phase. Dividends and share value growth are mainly used in
understanding the financial performance of stocks, which could help in creating an adequate
portfolio for investment (Finn 2017). Hence, stocks with high dividend yield can provide the
maximum amount of returns, which are used in creating the overall portfolio for MS B.

FUNDAMENTALS OF INVESTING
3
2. Providing relevant recommendation to MS. B:
Investment Per sqft Price per sqft Amount Return Return
Residential
Condominium 1,200.00
2,80
0.00
SGD
3,360,000.00
SGD
84,000.00
SGD
114,000.00
Commercial
Office 1,200.00
2,80
0.00
SGD
3,360,000.00
SGD
84,000.00
SGD
114,000.00
Mortgage
payment
SGD
(84,000.00)
SGD
(84,000.00)
Return SGD
84,000.00
SGD
144,000.00
Investment Current
share price
Number
of Shares
Amount Return Return
F-REIT 2.9 2
50,000
SGD
725,000
SGD
32,625
P-REIT 1.5 6
10,000
SGD
915,000
SGD
61,763
Total Investment SGD
5,000,000
SGD
178,388
SGD
238,388
Particular Value Amount
Total return from investment SGD 178,388 SGD 238,388
Return from investment 3.57% 4.77%
Inflation rate 3.00% 3.00%

FUNDAMENTALS OF INVESTING
4
Percentage return from investment 0.57% 1.77%
Amount return from investment SGD 28,387.50 SGD 88,387.50
From the evaluation it could be detected that the portfolio of MS B consists of both
property and REIT, which could allow her to generate adequate returns and diversify her
investment. The portfolio consists of F-REIT and R-REIT stocks, as they provide the highest
dividend yields. These combination of the portfolio is relevantly adequate to support financial
stability and return from investment. In this context, Alberg and Lipton (2017) mentioned
that investors by using adequate diversification method can generate high level of income
from investment. On the other hand, Naik et al. (2017) criticises that portfolio creation is
conducted with adequate research or else risk from investment generally increases over time
and hampers investment capital.
The tables mainly depict the overall portfolio, which is calculated for MS B and might
help in generating high level of return from investment. For improving the financial
performance of MS B adequate portfolio is created, which comprises of real-estate property
and REIT, as it could help in generating high level of income from investment. The returns
from property mainly ranges from SGD 84,000 to SGD 144,000, which might help in
detecting the minimum and maximum return from investment. The portfolio includes both
Residential Condominium and Commercial Office, which helps in generating high level of
returns. Moreover, mortgage measure is used in accommodating both the property in
portfolio, which help in generating high level of income from rent revenue. After adequate
mortgage payment the returns provided by property investment ranges from SGD 84,000 to
SGD 144,000. Finn (2017) stated that investors by using technical and fundamental analysis
can detect investment opportunity, which might support their return generation capacity.
However, Prokopenko and Tymoshenko (2017) indicated that stock evaluation mainly loses

FUNDAMENTALS OF INVESTING
5
friction when economic crises is in progress, as the entire stock value declines during the
period.
The financial viability of the portfolio can be detected from investment, as it allows
MS B to generate high level of income. The portfolio is well invested in both shares and
property, which falls under real-estate industry. This relevantly indicates that financial
performance of the portfolio ranges between 0.57% to 1.177% after deducting the overall
inflation rate from returns. This would eventually allow MS B to generate high level of
income from investments. From the overall investment return of SGD 28,387.50 to SGD
88,387.50 can be obtained by MS B in adverse and positive situation. This range of
investment could provide MS B to improve her return from investment, which is been
invested in property industry of Singapore. Kok, Ribando and Sloan (2017) mentioned that
range of investments allow investors to identify the risk adjusted return from investment,
which could be provided from different stocks.
Hence, the above drafted portfolio could allow MS B to generate constant return from
investment, which in turn could raise investment capital. The focus of investment is based on
property market, which is currently situated in Singapore. In addition, the use of dividends is
mainly used in formulating the portfolio, as high dividend yield REIT is used in the
portfolios. Therefore, MS B with the drafted portfolio could compensate for the rising
inflation rate and generate returns, which ranges between 0.57% to 1.177%.

FUNDAMENTALS OF INVESTING
6
Reference:
Alberg, J. and Lipton, Z.C., 2017. Improving Factor-Based Quantitative Investing by
Forecasting Company Fundamentals. arXiv preprint arXiv:1711.04837.
Benton, A.I., Huerta-Sanchez, D. and Pyles, M.K., 2017. The Impact of Market Conditions
on Voting Results in a Student-Managed Fund. The Journal of Trading, 13(1), pp.72-79.
Finn, A., 2017. Smart Women Love Money: 5 Simple, Life-changing Rules of Investing.
Simon and Schuster.
Kok, U.W., Ribando, J. and Sloan, R., 2017. Facts about formulaic value investing. Financial
Analysts Journal, 73(2), pp.81-99.
Naik, V., Devarajan, M., Nowobilski, A., Page, S. and Pedersen, N., 2017. Factor Investing
and Asset Allocation: A Business Cycle Perspective. Research Foundation
Publications, 2017(1), pp.22-26.
Prokopenko, V. and Tymoshenko, O., 2017. The Mechanism of Ensuring Ecological and
Economic Efficiency of the Iron-Ore Deposit Exploitation. In Advanced Engineering
Forum(Vol. 22, pp. 128-134). Trans Tech Publications.