Was My Rebalancing A Mistake With Another Impending Turnaround For REITs- Sustainable Reversal Or Another Dead Cat Bounce

This is my third time writing on this topic, so it shows I have been 'scammed' by the fake rally twice prior, the first time back in December 2023 and the second time in September 2024.  Around 10th March 2025, REITs started staging its third rebound, with the CFA ETF up 4.2% within one week.  So will this uptrend finally last, and does it mean that I have made the wrong decision to rebalance my portfolio previously by selling part of my REITs allocation to buy banks?

Frankly speaking, I have no crystal ball to foresee whether the rally will last, but personally, I think it may turn out to be short-lived as well (although I hope I am wrong once again).  While the recent drop in the 10-year yield might seem like a positive catalyst for REITs, it is important to consider the underlying reason behind it.  The decline in yields is possibly largely driven by a "flock to safety" from investors who fear an impending recession due to escalating trade tensions and tariffs imposed by Donald Trump.  Historically, a recession has never been good news for REITs, as it often leads to lower rental income, declining asset values, and increased difficulties in securing refinancing.

As such, was the recent rebalancing move the right one?  Or will I miss out the possible huge rally for REITs in the near future?  Honestly, I do not know.  However, I am comfortable with my decision because it aligns with my investment philosophy and risk tolerance at that point in time.

Following my portfolio rebalancing, my current allocation by market value is as follows:

• 37% REITs

• 31% Banks

• 20% Other Singapore Stocks

• 12% US Stocks

From a capital allocation perspective, the breakdown is slightly different:

• 46% REITs

• 30% Banks

• 15% Other Singapore Stocks

• 9% US Stocks

These numbers reveal an important insight, where my allocation to REITs before the rebalancing was indeed too high.  While REITs offer attractive dividends and long-term potential, having an excessive concentration exposes me to significant risks, especially in an uncertain economic environment which may return to inflationary levels due to trade war.

In my opinion, my current allocation strikes a good balance between defense and offense.  The increased bank allocation provide predictability in my dividend income, at least in the near term for the next 2 years, while REITs continue to generate dividend income and even potential capital appreciation over the long run when they recover from the doldrums.  Meanwhile, the diversification into other Singapore stocks and US equities ensures that I am not overly reliant on a single sector or geographical market.

Ultimately, investing is not about getting every call right.  Instead, it is about positioning my portfolio in a way that aligns with my risk appetite and long-term goals.  While the future remains uncertain, I believe my current allocation gives me the best chance to navigate the evolving market landscape with confidence and peaceful nights.  Barista FIRE, here I come...!