If you are a banking and finance professional, chances are that you would be quite careful when it comes to strategising and evaluating your investments. Kevin Law, who has worked in the finance industry for two decades and is currently responsible for raising capital in the real assets, private fund management industry, is a case in point.
“I have subconsciously adopted a conservative mindset, preferring to avoid high-risk ventures because I do not have the gumption, and simply cannot afford to put a large percentage of my investment portfolio on a risky bet,” explains Kevin, who is in his 40s.
Having been in the banking and finance industry for his entire career, Kevin has personally witnessed the volatility of listed stocks, which can be very nerve-wrecking for investors who cannot stomach such unpredictability.
“Only traders and those in the know who can navigate quickly can handle such pressure. For me, I lack the bandwidth to be monitoring listed stocks on a real-time basis,” he comments.
Conviction can sometimes be sound investment acumen
That said, Kevin concedes that he will still venture into listed stocks if he has a sound knowledge of, or possesses a strong conviction about a listed company’s long-term prospects.
He reveals: “There have been occasions when I simply invest because I feel very passionately about a particular strategy or sector.”
On several occasions, he has invested in listed stocks without carrying out significant due diligence, simply because he felt compelled by his convictions. “This is, by no means, a sheer coincidence or a stroke of luck,” he says, but concedes that it is important to look out for the associated risks as well.
He cites his investments in air-travel related stocks during COVID-19, banking on their recovery upon the easing of travel restrictions, as well as his investments in listed companies that mine for lithium, as his more recent successful investments.Sign Up at RealVantage
Take a leaf out of the pros’ books
Like many investors, Warren Buffett ranks high on Kevin’s list of investment gurus, whom he holds in high regard. In particular, Buffett’s value investing concept is something that Kevin can relate well to and resonate with. He explains: “Simply put, value investing involves selecting stocks whose share price is trading below its intrinsic value or book value. This means that the stock is currently undervalued and is poised to rise in the future.”
Additionally, Buffet invests in companies that he has a strong conviction about and Kevin shares the same belief. “If you enjoy using a particular product and derive utility from it, you would naturally want to invest in the company that produces it,” he opines.
To give an example of value investing, Kevin mentioned that during COVID-19 when the office and retail sectors were in the doldrums, astute investors were actively buying into such spaces because they knew that the pandemic would be transient. These investors were looking at a long-term investment time horizon, and knew that life would eventually return to normalcy.
“Now almost three years after, people are slowly returning to the office and retail businesses are gradually thriving again, with increased patronage. So there you have it, value investing has really paid off for these investors,” he says.
Important to know your property before you invest
Previously working in Melbourne before relocating to Singapore, Kevin was required to contribute to superannuation (or simply 'super'), which is a compulsory system through which all employees in Australia are required to place a minimum percentage of their income into a fund to support their financial needs in retirement. Funds in supers are then invested in a range of assets to help grow their retirement nest eggs. Essentially, this would be Australia’s equivalent of the Central Provident Fund in Singapore.
“Buy into the core areas, tier-one markets, where long-term demand will remain high. In a housing market, unless demographics are unfavourable, property prices should appreciate in the long term.”
As supers typically have a significant exposure of around 50% in equities, Kevin prefers to diversify the rest of it in other asset classes, such as real estate, to spread his investment risks.
He opines: “But I don’t just invest in any real estate. Before I take the plunge, I will have to ensure that it will bring good value to my overall investment portfolio, taking into account the associated risk exposure. The real estate should also be relatively more liquid than what I currently own. In addition, I need to consider if it is a short-term yield play or has long-term capital appreciation prospects — or a combination of both.”
“Buy into the core areas, tier-one markets, where long-term demand will remain high. In a housing market, unless demographics are unfavourable, property prices should appreciate in the long term,” he asserts.
A “godsend” to real estate investors
It has been more than half a year since Kevin’s first investment with RealVantage, which saw him participating in the Halsten Multifamily project.
Before taking the leap of faith to invest with the firm, he took time to understand its business model and investment processes, and learnt that the way RealVantage performs its due diligence before confirming a deal is similar to how institutional investors carry out their due diligence.
He notes: “The investment team was candid in its approach towards ascertaining the viability of an asset, identifying its location, determining the key drivers for cash flows, and when the cash flows will eventually flow back into the investment. They were also forthcoming in sharing the associated risks, risk mitigation strategies, as well as fall-back arrangements, and I really appreciate that.”
Kevin is also impressed by the fact that he is able to participate in real estate deals globally, which are typically only accessible to institutional investors, with an outlay of only USD25,000. Investors with RealVantage are also able to choose to invest in and fractionally own real estate projects that suit their risk appetite.
Above all, Kevin is glad that he does not have to manage the day-to-day property-related matters when he invests in a property with RealVantage, as these will be handled by a professional team of experts. It is no wonder that he literally describes RealVantage as a “godsend” to real estate investors.
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Disclaimer: The information and/or documents contained in this article does not constitute financial advice and is meant for educational purposes. Please consult your financial advisor, accountant, and/or attorney before proceeding with any financial/real estate investments.