IV
"This is partially exactly what is happening..."
Is "partially exactly" like "almost zero" (being not zero), or is it more like "Army Intelligence" (being not intelligent).
Or maybe it's more like (to quote those muppet poets from Pommyland) "Definitely Maybe?"
Just curious...
sorry my time was distracted by other matters, i just typed as i thought.
The reason i wrote 'partially exactly' is because the pyschological effect is working out exactly as i predicted.
There is a significant movement of investment psychology away from shares (except for maybe resource based shares) towards residential property.
The supply issue is still being constrained, and this is the final condition that i think is required in order for a more serious correction in property prices at some future point in time (exact timing: i have no idea, just like i have no idea where share prices will move in the short term).
I should also point out here that i think the supply issue will be the catalyst, but predicting any future catalyst is difficult. Often things come out of left field to rectify imbalances. So there is a chance that the catalyst will be something that is not currently in the 'risk assessment' of most investors.
Eitherway i dont plan to subject myself to such risk (especially if under a heavily geared structure).
Whether its luck or skill i dont know, but i have never been caught in any bubble market (share market or property market). Yet over time my returns on investment have been satisfactory.
I should also point out here, that i could never have predicted the consequences of the GFC on the australian share market in 2007. I didnt think there was excessive 'bubbleness' in the share market in 2007, investment metrics were 'stretched' but not excessively bubble like.
Yet i had minimal investments in the australian stock market in 2007: why: because i couldnt see sufficient margin of safety to risk my capital.
Likewise now in 2010, i still see structural reasons to own residential property. Buti also see the investment metrics 'stretched'.
I have made very good returns from my property portfolio, and rather than just refinance to capture the higher asset prices, i also want to take 'money off the table'.
I could well be too early in starting to take my capital out of property, but precise timing has never been my strong point (note this relates specifically to the melbourne market, i have no idea on other areas).
Because i cant predict the bottom of markets i use dollar averaging downwards.
Because i cant predict the top of markets, i use dollar averaging outwards (ie slowly exiting my capital as prices rise above my intrinsic value range).
Over time these two combinations create more than satisfactory returns.