Well, in some ways I could have used the terms "Negative Gearing" and "Positive Gearing" in the title and people would probably roll their eyeballs and say "Oh no, not again".
In the stockmarket there is the concept of value stocks and growth stocks. I believe this generally refers to stocks that, respectively, offer good dividends (yield) or good capital growth. Just like the property market, it seems there is a relationship between yields and capital growth.
Interestingly, people make money out of the stock market using both forms of investing, which to my mind partly reinforces the fact that negative gearing is not necessarily an altogether bad thing, since negative gearing is essentially investing for cap growth.
I did, however, want to broach this subject perhaps in its more direct form concerning investing for income or cap growth, in the hope that by "side-stepping" the "gearing terms", something useful might come out of the discussion.
I guess the angle I'm particularly interested in is that, over a long term time frame, is it capital growth or income that has the greatest potential to make you money.
Does anyone believe one group (the value investors or the growth investors) conclusively comes out ahead.
Or should we pay heed to say Jan Somer's advice which suggests (going from memory) that the overall property return will typically be 17% regardless of the growth/yield split?
Kevin.
In the stockmarket there is the concept of value stocks and growth stocks. I believe this generally refers to stocks that, respectively, offer good dividends (yield) or good capital growth. Just like the property market, it seems there is a relationship between yields and capital growth.
Interestingly, people make money out of the stock market using both forms of investing, which to my mind partly reinforces the fact that negative gearing is not necessarily an altogether bad thing, since negative gearing is essentially investing for cap growth.
I did, however, want to broach this subject perhaps in its more direct form concerning investing for income or cap growth, in the hope that by "side-stepping" the "gearing terms", something useful might come out of the discussion.
I guess the angle I'm particularly interested in is that, over a long term time frame, is it capital growth or income that has the greatest potential to make you money.
Does anyone believe one group (the value investors or the growth investors) conclusively comes out ahead.
Or should we pay heed to say Jan Somer's advice which suggests (going from memory) that the overall property return will typically be 17% regardless of the growth/yield split?
Kevin.
