It's just been 4 days since Trump was elected as the new President and he's done what the current term politicians cannot do in 8 years, i.e increase inflation.

Trump policies are pro-growth businesses and it is forecast that inflation and interest rates will rise in tandem accordingly.

This is probably the main reason why defensive counters like telcos, utilities and reits are getting hammered since Trump won the election and you can see that from my watchlist below.

A lot of people are speculating that the drop is due to the possible rate hike in December. I think it's way a lot longer and deeper than that. If you look at how the 2, 10 and 30 years US treasury yields are moving, it's saying a lot on the dynamics of what we are entering as a new environment phase of normalized interest rates.

The higher risk free rate is going to go, it would require a similarly higher yield on the equities to trade the premium difference. 

If you are an income-focused investor like me, this is absolutely great stuff going on because now we can finally expect higher yields to come for many risk-off assets that we are owning on our plates. If my lifestyle requires 6% in the past and I can get higher than that in the new environment phase, then I'd be a happier person.

Again, it depends on how much comfort are you willing to hold for that income yield right now. This is a lot different from the bargain we see back in January this year because that is based on a China fear and today a whole new phase is taking place.

It also depends on how much warchest we are currently holding in our pocket to take advantage of the situation. I am currently at about 52% cash so I might nibble quite a bit along the way and increase the yield on my portfolio. But if you are almost dry, I'd reckon you wait until the 30 year treasury rate hits 3%, which could happen almost anytime by end of this week given the rate it is running.

Personally, I am on the queue for CMT to nibble at a range of about $1.86 to $1.88 as it is currently right at their 1x book value, which is a great valuation to buy over the last 10 years. Again, we've been in the low interest rate environment almost for the last 8 years, so it's difficult to adjust to the new normalized valuation. FCT is also another one which almost hits their book value, so I'm most likely camping in the first round at 1.90, which is right at their book value.

I'm also likely to add my second round for FLT if it hits $0.86. I have initiated a position last week at $0.925 in what I thought to be a great long term addition to the portfolio. I'll speak more about why I buy this in my separate posts.

Someone asked me about CCT today but I doubt I like it at current valuation for now. It's still currently hovering at a rather "not cheap" valuation, relatively short lease for their office and a rather competitively low cap rates for their Singapore office. Add that together with the supply glut and you can see why they'd be in a lot of trouble in the near term.

I guess no point guessing where the market is going to go, let's see from here if we can turn that into an opportunity instead.