It depends on your investment objective.
It is the same thing as you buying a property and are you looking at rental yield or capital appreciation? Both make you money but it is about what you want to focus more on.
But you must know what you are in for. If you are looking for dividends for example, then Singapore REITS usually produce a yield of 4-5% which is reasonably achievable. The question is, is this what you are looking for? If you have $100k capital today, a 5% yield is only giving you $5k worth of dividends, disregarding any change in the share prices. Is this amount meaningful to you or is it good enough to start with?
For retirees who may have a sizable amount of assets say $2 million, a 5% yield will mean $80k of passive income a year. We can say that is a purposeful amount to the majority of the people. But with anything less than a million dollars, the passive income generated from dividend stocks often may not allow you to get by. It’s good extra money to have, but you probably ain’t able to quit your job and just rely on that stream of dividends.
One of the biggest misconceptions retail investors have is that dividend stocks are less risky and safer than growth stocks. How risky a dividend stock is depends on its nature of business or what happens in the market. During the market fallout of COVID-19, all stocks are not spared from the indiscriminate selling, including dividend stocks. Or the best in breed, called dividend aristocrats, which are companies in the S&P 500 index that have paid and increased its base dividend every year for at least 25 consecutive years. Some of these dividend aristocrats include Pepsi, Johnson and Johnson, McDonald’s and Lowe’s. There is no doubt about it that these companies are supposedly recession proof and we need to use their products during good or bad times. But take a look at their charts during the COVID crash.