Is Buy and Hold still a good strategy

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Panic,

Are you aware that in shares technical analysis isn't anything of the kind

In property you want to look at the fundamentals!

Cheers,

Aceyducey

Acey

I'm yet to work out a " fundamental reason " which would increase the value of a property in somewhere like Logan or Rockhampton by any where from 50% to almost 150 % in under two years.

On the basis of a change in the " fundamentals " it shouldn't happen , but it does. Does that mean if I can see it coming I shouldn't take advantage of it because I can't explain it in terms of a change in fundamentals ....

I'm happy to buy in places which do have good fundamentals ( and my next purchases will have good fundamentals ) , but if you see opportunities elsewhere , why ignore them ?

Panic

Very rudamentary analysis. Purely looking at trends and prices breaking above previous highs ( areas of resistence ) . In Logan I bought before the prices broke through the high set by the peak in early 90's , simply because talking to the agents I could see that there was a rapidly decreasing supply in properties available and an increasing demand from investors. Once prices broke through that high,prices moved more rapidly.

Another thing I did was ask the agents where they were sourcing their properties. When a market heats up , the agents will send letters to all of the owners on their property management list. Once the owners realise they can finally get what they paid for the property seven or eight years , they are happy to get rid of it .... ( after all they've been holding a negatively geared property for several years and seen the prices go backwards.... ) .When the agents are having problems getting their " owners" to sell is another good indication that supply is about to dry up.

At the moment in Sydney, the down trend is established , and in trend terms it is more likely to continue in the established direction than change direction. From my own observations there needs to be significant favourable changes in the economy going on for a while before the property market changes direction.

I've read Elder , but I think there are better Authors around. I don't think he added much to my knowledge. Van Tharp on the other hand.....

See Change

 

[Panic]

Panic,

Are you aware that in shares technical analysis isn't anything of the kind

In property you want to look at the fundamentals!

Cheers,

Aceyducey

You are right Acey.... that is why I havent got any IP in Sydney at the moment. The fundamentals are not there.
Opposite to the share market where I as a trader I can make money on the short side as well, in IP I cant do that. Let me know if you have found a way to make money in Bear IP market I would love to hear that and learn

Seech,
Here is what technical indicators in analyzing the IP in Sydney I have looked at:
- Number of properties for sale (even MACD would be applicable, but I haven’t done that)
- Average median price in the area and its EMA
- Number of properties for rent
- Average rental price and its EMA
- Average sell time
- Average rent time (bit hard to get, more of a general "agents" view)

Just my 2c

Thx
V

 

[Andrew_A]

You are right Acey.... that is why I havent got any IP in Sydney at the moment. The fundamentals are not there.
Opposite to the share market where I as a trader I can make money on the short side as well, in IP I cant do that. Let me know if you have found a way to make money in Bear IP market I would love to hear that and learn

Seech,
Here is what technical indicators in analyzing the IP in Sydney I have looked at:
- Number of properties for sale (even MACD would be applicable, but I haven’t done that)
- Average median price in the area and its EMA
- Number of properties for rent
- Average rental price and its EMA
- Average sell time
- Average rent time (bit hard to get, more of a general "agents" view)

Just my 2c

Thx
V

This is a very interesting idea, applying share ideas to property analysis, one that has a LOT of merit if done properly I think. Steve Navra's 'Rental Reality' is once such idea I think.

Regarding going short property it's difficult with bricks and mortars unless you are creative perhaps.

I refinanced to lock in my equity in 2004, though this was not entirely nescessary perhaps as my property was around the median for the suburbs and has done quite well in holding value. This equity can then go on counter cyclical and better investments, getting your money working with double or triple leverage. I think for people with property that is subject to large capital loss (luxury property etc) locking in equity is a very important idea.

You can always sell your property, though this is a cumbersome method. I heard from an agent about a recent sale in my suburb for 1.2 million, problem is the person bought it for 1.8 million less than a year earlier So there is money to made in trading luxury property I think.

One benefit I am receiving by holding my property (which has gone backwards slightly in the last two years in value, and might do little for the next so many years) is that the rents are going up nicely now so the yield is getting better.

Historically it might be remembered that the best times to buy property are when most people are saying you are crazy for buying it

SC: I agree completely about Van K. Tharp being much better than Elder, and also the Market Wizard series by Schwager are must reads for all investors/traders.

 

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Andrew

To my understanding Rental Reality would be classed as a " Value " indicator. Just because something is good value doesn't mean it's going to go up in price ... soon.

I'll stick to trend following.

See Change