As the world comes out of the recession some economies are doing better than others and some economies have remained pretty stable. A pertinent question is how to invest safely and profitably in stable overseas markets. Investment in Singapore, for example, is attractive as it is economically successful and stable as well as politically stable. But, in emerging markets such as Singapore what do you invest in? A strong possibility is in Real Estate Investment Trusts, Reits. Asian Reits are catching on. The success of Asian Reits encouraged some wealthy Chinese investors to look at Reits in the USA. Reits may be a good bet for investment in Singapore and elsewhere in Asia.
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Investment in Asian Reits in markets such as Singapore can earn you more than ten percent with no withholding taxes for individual investors. Singapore is an economic center in Asia. It has developed its technology center, is into ship building, is soon to open casinos to attract tourists, and has ridden out the recession fairly well. Investment in Asian Reits includes those in China. The development of a $60 billion Reit market in China offers institutional investors a safe haven from the currently volatile Chinese stock market. This market has whetted the appetite of Chinese investors who have become knowledgeable about Reits and are buying Reits in the USA also.
For those not conversant in Reits, a Real Estate Investment Trust or REIT (pronounced reet) is a tax designation for a corporation that invests in real estate that and reduces or eliminates corporate income taxes. REITs are required to distribute 90% of their income, which may be taxable, to its investors. REIT’s are meant to provide a similar structure for investment in real estate as mutual funds do for stocks. Reits are both publically and privately held and are listed on stock exchanges.
When property values dropped with the recession investment in Asian Reits as well as US Reits suffered. Now that world wide economies are on the mend there are some great bargains to be had in Reits with depressed values.
Looking a Asia as being the growth engine coming out of the recession makes investment in Asian Reits attractive considering that some individual Reit values dropped as much as 70 percent in the last two years. A ten percent return on investment in Singapore combined with capital gains on recovering Reit values should be an attractive deal.
There are unstable emerging markets and there are stable emerging markets. Investment in Singapore, as an example, could be considered a wise move in a stable emerging market.
As will all investments research is the key. No one has a crystal ball and no one can tell how soon or how well the recession will mend. As such, keeping in touch with your investments is mandatory. We have talked before about handing your investments over to a money manager. Even if you are getting good returns you need to know what the money manager is doing and be ready to pull your funds back if you are not comfortable with process or results. Being knowledgeable about issues such as investment in Asian Reits will help you direct your own investments to your profit.