Quote:
Originally Posted by lazyplane
Suggest you measure this way over the life of x years say 3 years:
Your 20% injection is exposed to SGD. Consider your MYR 1.3 -1.5k as your dividend flow/returns over this investment. Assume spot rate transfer out.
If the FX /interest view is against you, your 1.3-1.5k MYR will get hit and shrink. If it improves , then this will increase.
If everything is in your favour, you will see your 20% stake increase in value ie house price go up, dividends get higher and higher in value ie fx and i/r, and your "asset stake" increase from 20% to x % due to loan amount reducing after factoring maintenance cost.
All the best. I think SGD trend is hard to predict despite whatever one says. eg
Many have lost big time because they thought SGD appreciate against USD. While history can point to this, when certain events happen, the bumps along the way can really be difficult to take
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Thanks.
I think at the end of the day, and I've said this many times, you have to go in with your eyes open. Anyone that goes into a Msia investment without thinking that SGDMYR exposure is a risk is setting himself up for a fall.
I see the risk, but at the end of the day if I think its a risk worth taking because the upside-downside analysis makes sense, I mitigate the risk as best I can (Msia loan) and I go in.
If your primary analysis is centred around FX risk, you'll never go outside of Singapore. Which means you'll probably hv done well for the last 10yrs, but the past is no perfect predictor of the future, and now Singapore valuations are looking pretty toppish across the board (real estate, bonds, equity and currency).
I may be right or I may be wrong - nothing in life is assured. But I go in with my eyes wide open, and I never regret. If I'm right, good. If I'm wrong, I learn. Key is to parcel out our risk so that one mistake can never kill you.