$Lion-phillip S-Reit(CLR.SG)Context:I noticed that S-REIT prices were declining yesterday, and I saw this as a potential…

$Lion-phillip S-Reit(CLR.SG)

Context:

I noticed that S-REIT prices were declining yesterday, and I saw this as a potential opportunity to add to my existing position at a lower price. My thinking was that buying more units during the price drop could help lower my average cost and potentially improve my overall returns over the longer term. Since I was already interested in S-REITs for their distribution income and potential capital appreciation, I viewed the decline as an opportunity to strengthen my position rather than focusing only on the short-term price movement. However, I was also aware that prices could continue to fall due to factors such as interest-rate expectations, rising financing costs or concerns about the property market.

My trade:

I added to my S-REIT position yesterday because I wanted to take advantage of the lower prices and reduce my average purchase cost. Rather than committing a large amount of capital at once, I decided to add to my position gradually so that I could maintain some flexibility if prices declined further. My main reason for buying was to improve my entry price while maintaining exposure to potential distribution income and future capital appreciation. I also believed that accumulating units at a lower price could be beneficial if the sector recovered over the longer term. However, I recognised that a lower price does not necessarily mean an investment is undervalued, so I needed to consider the underlying fundamentals as well.

Takeaway:

Next time, I would assess whether the price drop is justified by the REIT's fundamentals, set a target buying price and limit my additional investment to a planned position size instead of buying mainly because the price has fallen.