Hi,
Ive been much more successfull with property than shares in the last 10 years but I think its wrong to say that
shares are riskier that property.An investment in shares could be a managed fund, single company, it could be option or a exotic warrant.
It could be highly geared, 100% owned . It could be several shares all hedged with a put options.Likewise property could mean many things. People choose their own level of risk when they invest in anything.
On average and in the long run the worlds share markets have outperformed the worlds property markets.
That being said I still prefer property for one very important reason. Retail property markets are full of huge
ineffciences. In the case of a messy devorce a house might be dumped at a 20% discount to the market
where as the couples bhp shares will go at the days market price.The share market is a much tougher game because everybody has the same objective. Make Money.
People have all sort of reasons to buy and sell property, many are emotional so the competitions not as tough.The biggest ever property bubble in history was in Toko in the late 80s. Property there crashed in the early 90s and even today
is only worth about 10% as much as it was at the height of the boom. Yes thats right 10% .It would be virtually impossible for that to happen here but it just goes to show that property crashes do happen.
Taking on a large mortgage when cash flow is tight is just as risky as buying and holding a few of your favourite companies
Ask all the sub prime mortgage customers who are getting forclosed on right now in the US.The big winners at the end of the day are the people who are sitting around with lots of free cash waiting to buy the forclosed properties for a big discount.
Good luck to people who think they can outperform the share market by trading. Im not saying its not possible but I believe most peoples better than average results are because standard deviation (getting lucky).
Just look at the history of managed funds vs index funds over 20 years almost nobody ever beats the index.
And those funds have rooms full of smart guys with their fingers right on the pulse.Hi All,
I own 2 propertys and a small share portfolio. Over the last few weeks I sold off some of my shares like many others due to confidence – and consequently lost about 2k. Now I still retain some shares in blue chip companies mind you, but I sometimes goto sleep at night feeling like I want to puke just thinking what the market might do, and either if the market will bounce back or I will lose more money on paper.
On the other hand I can goto sleep at night and not worry about my property. There was 1 time however I was stressing every night, and that was in between tenancies were my property manager did not rent my property out for 2 weeks, I simply listed with another agency, and they got it rented out straight away – I suppose in this way you have more control over the situation.
Either way both have their pros & cons however me personally I seem to lose less sleep over property
cheers guys
Mark Grant thats the smartest response in the whole thread.
seank wrote:Hi All,I own 2 propertys and a small share portfolio. Over the last few weeks I sold off some of my shares like many others due to confidence – and consequently lost about 2k. Now I still retain some shares in blue chip companies mind you, but I sometimes goto sleep at night feeling like I want to puke just thinking what the market might do, and either if the market will bounce back or I will lose more money on paper.
On the other hand I can goto sleep at night and not worry about my property. There was 1 time however I was stressing every night, and that was in between tenancies were my property manager did not rent my property out for 2 weeks, I simply listed with another agency, and they got it rented out straight away – I suppose in this way you have more control over the situation.
Either way both have their pros & cons however me personally I seem to lose less sleep over property
cheers guysYeah…tell me about it, except I waited 8 weeks!!!!!!!!
seank wrote:Hi All,I sometimes goto sleep at night feeling like I want to puke just thinking what the market might do, and either if the market will bounce back or I will lose more money on paper.
On the other hand I can goto sleep at night and not worry about my property.If it stress you that much, don't watch the share prices day to day, buy some good companies put the holding certificate in your bottom draw and forgot about it for 12 months, after all I think you would be having sleepless nights if every day you got quoted how much your property would sell at auction that day to.
and if your investing in good companies and they do drop in the short term, don't worry it is completely normal remember you are investing for the longterm just hold them and maybe buy some more.
at the beginning of last year I bought 1000 Toll shares for $13.86 (which I was happy represented a good price), 2 weeks later they were worth $10.40, did I panick and sell no I was wrapped this was even a better price than I had paid last time so I bought another 3000 shares, today after a share split my shares are valued at about $25.00.
What would be the return on cash invested in some of these sydney properties, on an 80% lend including as holding and buying costs,
Yes the article also said that rents are up, but this can be the same as share prices droping while there dividends are increasing. shorterm drop you might say, well a shorterm drop in the share market lasts for a day or two a shorterm drop in property last months or years.
Investing is a science but at the end of the day good timing and a little good luck is very helpful.
The smart investor like Steve knows when to sell …
D
lol, he does?
he predicted a 10% fall in prices but the opposite has happened.
Yep nobody is perfect >>
crashy wrote:the problem here L.A is that you think your comments are constructive. They arent. You make sweeping statements that are just not true, not only that, but you cannot back up your own comments with fact yet expect everyone else to.
I don't know that my comments are constructive or destructive. I would hope they are informative. People ask for opinions and I give mine, based on what I know. I never profess to be an expert. If we all waited until we were experts on a subject then no-one would post. I don't expect people to back up their comments unless they make a contrary comment or a personal attack on me. So far I've heard that I'm wrong, I'm a fool, and that there are various ways to avoid risk, anyone can say that. But no-one was forthcoming with detail; just a name of a stategy. That pisses me off.I would define a "smart-arse" as someone who is opinionated and gives the impression they are knowledgeable but in fact is inexperienced and uneducated on the subject. They also tend to criticize things they dont understand. Now which of us qualifies?
"a smart-arse (British, very informal, American, very informal)someone who is always trying to seem more clever than everyone else in a way that is annoying."You are definitely more experienced on the subject of shares, but rather than help and educate others, you belittle them with smart-arse responses such as "rubbish" and no explanation why it's rubbish. This is your style, and I am used to it; it doesn't bother me, but it would be good if you apply your expertise in a way that others might enjoy reading and get some benefit from.
Your arguments are filled with bias. The only valid response to bias is to expose it as such. Rebuttle is secondary. Its almost impossible to fully explain everything you queried to someone with no equities knowledge. In fact, it took me 200 pages in a course to do it. This is a property forum remember.
I noticed you didn't post until some idiot like me did first, then you attacked me. That's ok, but how about getting a post about what your beliefs are, based on your experience, and as someone who has lots, back it up. I am happy to be told I'm wrong, but don't treat me with disrespect.My expertise is property, no denying that. But my opinion still stands; companies can fold up and disappear. That is a real risk; it has happened a gazillion times and lots of very smart people have lost everything. Is it a slight chance? – of course; maybe very slim. Doesn't mean I'm wrong.
Instead of assuming an uneducated knob like me couldn't understand equities and not bother with them, give them a chance to learn, and let them make the decision to try and learn or not, rather than making that decision for them. You are basically saying that we are not good enough to learn what you know.
Yes, it's a property forum. So why don't the moderators delete all mention of shares, or muscle cars, or who's had a kid lately?I've had enough of this; I'm off to play golf.
Did I tell you I had a 2 under par – 70, with a triple bogey on the 16th hole last week? Hit my second shot "fat" into the creek in front of the green.
It wasn't a choke either; I lipped out for another birdie on the 17th, and birdied the last hole.
I was on fire. I'm thinking by this stage; touring pro.
Then I watched Tiger on the PGA and thought; who am I kidding?L.A Aussie wrote:Being a smart-arse and simply flipping us off doesn’t help anyone.this was the point where it stopped being a healthy debate and became a personal argument. I will admit that I could have handled my responses better and apologise if I came off as nasty or elitist in any way. I thought I was being respectful while making my case.
cheers
Well,
as I said; I'm used to you and you don't worry me – just disappoint me.
I've found my long lost love – golf.
see ya.well that will teach me to apologise wont it.
remind me not to play golf with you, afterall you are such a good sport
Property investing is just as risky.
- You have to tie up $200,000 on one property investment
- You have to pay stamp duty
- You have to pay cgt on large gain
- You could get land tax charged
- You have rates,insurance,water charges, maintanance, tentant damage
- low liquidity – cannot sell in a down turn quickly
Share trading
- You pay gst on low brokerage fee
- you pay low brokerage fee
- you can buy small parcels of $2000
- you can sell and time capital gains in small parcels
- you can own 100 different shares with $200,000
- you can diversify your portfolio
- You can sell your shares fast in a down turn and buy shares for a bargain after downturn
- No repair costs, rates, insurance,
- Yield can have 30% tax already paid. meaning you pay less tax on earning dividend.
- No vacancy periods
I like this topic. Its like the holden vs ford debate. It can never be won as it relies heavily on personal taste and expieriances.Still a good read but.
If it stress you that much, don't watch the share prices day to day, buy some good companies put the holding certificate in your bottom draw and forgot about it for 12 months, after all I think you would be having sleepless nights if every day you got quoted how much your property would sell at auction that day to.
Good comment Tysonboss, too bad its splashed across newspapers and news every night
I think thats the whole problem.
I found this intersting link – debate if you will !
http://www.murraywoodman.com/murraywoodman/property_vs_shares.aspCheers
L.A Aussie wrote:MasterREL wrote:You can protect shares with options or make extra income through writing options.Theres a lot of different strats.
O.K, now we're getting somewhere; how about some detail on a few of them.
I get plenty of detail about what a fool I am for mentioning yes, there is risk when someone asks, but it seems no-one want s to back up the pot-shot with some constructive advice about how to avoid that risk.Simple put option over your shares (1 put option is 1000 shares), or cfd short over your shares and warrants. Put option is more or less a safety net you can lock in profits at certain strike prices (e.g. 15.00 ,15.50, 16.00) You pay a premium which varies according to how much you want to insure it for and for how long. Volatility will also play a part in the price of the premium. CFDS are just click and your away, pricey brokerage pricey to hold long. You can also write put, call options over your shares for income. But if exercised must either buy or sell your shares at the set strike price the options were sold at. The details are detailed and are probably easier to just find on the net with a goggle search.
This is a very simple explanation and there is a host of factors to take into consideration. Should really know your Greeks before diving in.
Hi all
I did an excellent course called Trading For Success run by wealthwise education – David Novac. Since then I have made money in the stockmarket following Davids rules. I recovered the entire cost of the course including airfares and accomodation in my first trade. I have now been trading for a year and am up $30,000 which I consider to be pretty good for my first year.
There is risk in anything we do in life. The question is do you have the brains to educate yourself? I'm in the Results mentoring group because I wanted to educate myself about property. I did David's course because I wanted to educate myself about the stockmarket. My view is that I don't care how I make money as long as I do make money, whether its thru property or the stockmarket. And I will do whatever I have to to educate myself so I can minimize my risk.
If anyone is interested in finding out more about Trading For Success the website is http://www.wealthwiseeducation.com. I thoroughly recommend it.
Cheers
Michelle
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