There are an awful lot of books with all manner of styles of choosing shares. Personally I have decided to use managed funds for a couple of reasons. One being that it is easier and less time consuming and secondly it gives me another form of diversification. Diversification of investing styles by having another person choose some of my buys rather than putting all my eggs in my own basket!
Article on Diversification for the Property Investor
- Thread starter Simon
- Start date
There are an awful lot of books with all manner of styles of choosing shares. Personally I have decided to use managed funds for a couple of reasons. One being that it is easier and less time consuming and secondly it gives me another form of diversification. Diversification of investing styles by having another person choose some of my buys rather than putting all my eggs in my own basket!
Umm ... read just about anything Steve Navra has posted on this forum in the past.
Pretty neatly sums up all manner of questions regarding exactly what you propose..
And stirs up various points of view along the way too.
(Just in case anyone newish here is reading this thread and isnt aware .. I wasnt even going to post this but thought it could be useful)
T.
Pretty neatly sums up all manner of questions regarding exactly what you propose..
And stirs up various points of view along the way too.
(Just in case anyone newish here is reading this thread and isnt aware .. I wasnt even going to post this but thought it could be useful)
T.
Great post thanks Simon.
So Top, what asset class do you think investors should get into at the moment ?
first time i stumbled upon this thread - great thought process as usual simon. well articulated so that even tho i prefer property because i personally can increase the value thru some thought or work (instead of letting the market increase/decrease the value and not being able to "do" anything) i do have quite a few k's stuck in a managed fund, and add another $500/mth, just in case i come unstuck in my development gambles and need some fast cash - and hence can understand where you are coming from.
i hope everyone revisits this thread for a historical review.
i hope everyone revisits this thread for a historical review.
Very good thread. It is what Peter Spann is promoting at the moment but then again he makes a commission on getting people into the managed funds.
They have some really good products though. High leverage, what appear to be quality funds and low lending rates on the leverage. What was the post that was put up that covered moving everything between asset classes. I would be very interested in reading it.
I went to Peter's investor update a couple of weekends ago and he had an ex RBA guy talking who was very good to listen to. He was saying buy at mortgagee sales in Sydney in the near future on places that were bought off the plan.
Cheers for now.
Anthony
They have some really good products though. High leverage, what appear to be quality funds and low lending rates on the leverage. What was the post that was put up that covered moving everything between asset classes. I would be very interested in reading it.
I went to Peter's investor update a couple of weekends ago and he had an ex RBA guy talking who was very good to listen to. He was saying buy at mortgagee sales in Sydney in the near future on places that were bought off the plan.
Cheers for now.
Anthony
This is the first time I've read this thread and haven't read it all but must commend Simon for his opening post.
Most of you know that I am an active share trader and a little sceptical of the residential property model so popular here. I'm giving this as an opening disclaimer for those who don't know my history. My wish here is expand on Simon's post, not criticise it, so here goes:
It is not reasonable to compare RE with managed funds and then say that one can "work" RE to improve returns by doing renos and development. At my age and with my knees I ain't doin' no renos!!!!! And development is an active business and should be compared only with other businesses not passive investment. Do you know that you can "work" blue chip investments to achieve an extra 10+% (conservative)?
Kaf said: "According to your safety rule I have to put in $100 000 of my own money to join the managed funds cycle with $200 000 while with the same $100 000 I can have IPs worth $2 000 000 (using your 5% of own funds example)." But Simon wrote :"Going back to my earlier example – one can buy a $200K Managed Fund for no upfront fee, no mortgage application fee, no inspection fees, legal costs or stamp duty. Normally with an IP one allows 5% to cover these costs." If this was my only investment I would have trouble sleeping nights with a $2m debt with zero equity.
High gearing is available on stocks too. In Aug I opened a broker account by depositing $10k and providing the same personal info that you would to open a savings a/c. (Less than that req'd for a credit card) This a/c is worth $18k today, but I "trade" it. It allows me to buy/ sell, long/short parcels of $10 -$20k with just $10 min brokerage. I can have 5 or 6 positions open at once and still have a buffer. Naturally I watch it daily but that's still easier than sanding floors
Simon was correct when he said that having $20k in a fund is hardly diversification. I have that much in Au/Ag coins under my mattress, (not litterally!) but only a few years ago (before finding SS) when I was knocked back for finance for an IP, I didn't have much more than that in the stock market. I now have a top line of nearly half a mil geared abt 33%. Obviously I did not achieve this in managed funds but I put to you that I'm no genius. I will also admit to "topping up" the cash, but don't you do the same with -ve gearing? And I almost SHOUTED to the forum that the future is in resources, that we were in the early stages of a 25yrs resourse boom. If asked today, I would repeat the same advice but add that we are a few more yrs into it and that some of the cream has already been taken by the early adopters.
You guys know more about RE than I but if you were honest you would admit that you've read more'n one book, paid money up front for seminars, made mistakes and generally "worked at it". (I know you have ) I have also served my apprenticeship. I doubt mine was harder but I would just rather retire with a portfolio of companies paying franked divs ( I am now buying a core holding of these) than have the hassles of rental property.
The first investment seminar I went to, long before the RE boom, the presenter was keen on property but only as part of a cycle. His theme was to put new money into whatever investment class was in asscendency according to the investment clock. He didn't advocate wholesale abandonment of previous investments. I still think he had the right idea. And I still believe commodities are in assendency!!!!
Thommo
So, what if I can't spell ascendancy.
Another edit: Any opinions given here are of a general nature, and the author's opinion only. He holds shares in the resource sector.
Most of you know that I am an active share trader and a little sceptical of the residential property model so popular here. I'm giving this as an opening disclaimer for those who don't know my history. My wish here is expand on Simon's post, not criticise it, so here goes:
It is not reasonable to compare RE with managed funds and then say that one can "work" RE to improve returns by doing renos and development. At my age and with my knees I ain't doin' no renos!!!!! And development is an active business and should be compared only with other businesses not passive investment. Do you know that you can "work" blue chip investments to achieve an extra 10+% (conservative)?
Kaf said: "According to your safety rule I have to put in $100 000 of my own money to join the managed funds cycle with $200 000 while with the same $100 000 I can have IPs worth $2 000 000 (using your 5% of own funds example)." But Simon wrote :"Going back to my earlier example – one can buy a $200K Managed Fund for no upfront fee, no mortgage application fee, no inspection fees, legal costs or stamp duty. Normally with an IP one allows 5% to cover these costs." If this was my only investment I would have trouble sleeping nights with a $2m debt with zero equity.
High gearing is available on stocks too. In Aug I opened a broker account by depositing $10k and providing the same personal info that you would to open a savings a/c. (Less than that req'd for a credit card) This a/c is worth $18k today, but I "trade" it. It allows me to buy/ sell, long/short parcels of $10 -$20k with just $10 min brokerage. I can have 5 or 6 positions open at once and still have a buffer. Naturally I watch it daily but that's still easier than sanding floors
Simon was correct when he said that having $20k in a fund is hardly diversification. I have that much in Au/Ag coins under my mattress, (not litterally!) but only a few years ago (before finding SS) when I was knocked back for finance for an IP, I didn't have much more than that in the stock market. I now have a top line of nearly half a mil geared abt 33%. Obviously I did not achieve this in managed funds but I put to you that I'm no genius. I will also admit to "topping up" the cash, but don't you do the same with -ve gearing? And I almost SHOUTED to the forum that the future is in resources, that we were in the early stages of a 25yrs resourse boom. If asked today, I would repeat the same advice but add that we are a few more yrs into it and that some of the cream has already been taken by the early adopters.
You guys know more about RE than I but if you were honest you would admit that you've read more'n one book, paid money up front for seminars, made mistakes and generally "worked at it". (I know you have
) I have also served my apprenticeship. I doubt mine was harder but I would just rather retire with a portfolio of companies paying franked divs ( I am now buying a core holding of these) than have the hassles of rental property.The first investment seminar I went to, long before the RE boom, the presenter was keen on property but only as part of a cycle. His theme was to put new money into whatever investment class was in asscendency according to the investment clock. He didn't advocate wholesale abandonment of previous investments. I still think he had the right idea. And I still believe commodities are in assendency!!!!
Thommo
So, what if I can't spell ascendancy.
Another edit: Any opinions given here are of a general nature, and the author's opinion only. He holds shares in the resource sector.
