Well many believe everything will roll along while others believe the world is going to end. What do you guys think will happen IF we do have a slow down and how bad or long do you think it will be. If we do have a recession or a housing slump i hope it is just a period of no or low housing growth till debt reduces and then hopefully in a few years of we go again.What are your thoughts on posible recovery ideas. If you believe everything will be rosey and another boom is around the corner please post that too. I like happy stories. Cheers.
Yeah, crazy times at the moment, no one seems to be able to agree where things are headed,
Inflation is up, so are interest rates, global sharemarkets have dropped like dominoes, lots of boom or bust theories going round.
We have some local pressures on the invest market as well as global pressures,
For now I am just taking it as it comes, I am still looking for property deals and will buy if I find the right property.
I am also still investing in the stock market, I have a long term share portfoilio which I add a certain $ amount of shares every month no matter what the market is doing so I buy more when the market is down and less when it is high. I also have a few speculative holdings in small startup companies that should see some results by christmas.
as far as debt goes, I am retaining cash in my business to put off my company loans as they have the highest interest and build up my reserve if disaster does strike,
I believe that whatever happens – prudent people will do better than those with a high risk strategy.
My 2C
In times of stability – higher risk is acceptable.
in times of high risk – conservatism rules.Some people invested in Macquarie Bank for low risk. And…
" Australia's Macquarie Bank (MQBKY, news, msgs) said investors in one of its mutual funds would lose up to 25% of their money thanks to losses in the subprime sector." (Jim Jubak, msn money).
The problem with these sorts of investments is, when they start to fall; there is no bottom. There is no low risk in that.
L.A Aussie wrote:Some people invested in Macquarie Bank for low risk. And…" Australia's Macquarie Bank (MQBKY, news, msgs) said investors in one of its mutual funds would lose up to 25% of their money thanks to losses in the subprime sector." (Jim Jubak, msn money).
The problem with these sorts of investments is, when they start to fall; there is no bottom. There is no low risk in that.
G'day Marc,
I am not trying to knock you, but alot of your posts tend to paint alot of other assets classes as risky investments while making out property is solid as a rock.
I believe the property market is just as risky as the stock market, for many different reasons and that the perception of security is a bit of a myth,
MYTH 1- "property prices don't drop in value like the stock market",
Fact- yes they do, you may not notice it because your property value is not updated every 20mins or quoted in the daily paper and it takes months for the infomation on sales to be correlated and reported, and even if you do get bad news on house prices nobody believes it relates to their investment,…. also the share market may drop quickly but it also can recover quickly, when property drops it is down for the count for some months or years add to this the holding costs of you investment on an 80% lend and the loss is ballooned, so your actual return on your investment of 20% deposit might be a 200% loss.
MYTH 2- "I Haven't really lost any money because I am not planning on selling"
Fact- yes you have, If your property is neg geared you are loseing money every week, And if this statement is really how you feel well you haven't lost money if you weren't planning on selling your shares either,
MYTH 3- "property Is safe because people will always need some where to live"
Fact- well it's true, but they won't always need to live in your house or suburb and they will also need to buy milk, electricity, Petrol, and a million other goods and services provided by companies listed on the stock market, just because shares prices drop doesn't mean that the factories, shops, gas piplines, power plants, trucks etc etc etc stop making money it's just that the prices investors are willing to pay for them on that particular day has droped as long as the company keeps producing income and growing the share price will always recover.
MYTH 4- "The company I invest in could go broke and I would lose every thing"
Fact- Possibly, But what if no tenant wanted to move into your house, atleast with the stock market you have the ability to spead even a small amount of investment dollars accross many different companies, and sectors, with property you have to lump hundreds of thousands of dollars on one street address,
And finally remember an investor makes his choices based on risk and reward, property only doubles once in 7 – 10 years companies can double many many times in 7-10 years, so if you held a portfiolio of 15 companies over 7-10 years 1 might drop in value 3-4 may only move slighlty but the rest would probally have big gains some may even be star performers doubling 20 or 30 times.
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