Market Timing vs Buy and Hold

[dantheman]

Hi All,

I'm interested in how many people actually try to time the market compared to those who hold.

If you sell because you found the purchase was a mistake, or for other reasons such as losing job etc that doesn't count.

I am a beginner but I would like to think I am in the category of "I Buy only when I think the time is correct but hold until retirement"; although I got my 2nd property a bit late in this cycle.

Dan

 

[ani]

Hi Dan

What about trading in that selection and maybe it needs to be multiple choice.

I'd do several of those.

ani

 

[Jamie]

Hi Dan,

I agree with ani. For me, investing is about using a whole range of methods to reach your goals, rather than any one method.

Some properties might be for holding - these might be the ones in traditional blue chip suburbs you think will continuously provide above average yields and long term growth.

Others might be short term - a block of land or apartment bought early enough to lock in a low price, then sold once prices have peaked and long term growth is unsteady. Often its better to realise profits on these properties and place the funds where the returns are higher, rather than face potential price drops and an uncertain future.

Others might be bought with a view to subdivide or change to a higher use, others still to renovate and sell.

I dont think its possible to say that a person subscribed to only one method. Not only do different times calls for different measures, but so too do different properties.

Jamie.

 

[Aceyducey]

Ditto,

Very few investors use only one strategy.

Because it's a strategy guaranteed to sub-optimise returns.

Cheers,

Aceyducey

 

[lizzie]

i do all of those tactics mentioned by the others - but i did vote for buy whenever i can afford and hold until retirement, as that is my theoretical mainstay. i do buy whenever i can afford, mostly i reno and hold but i do i develop/subdivide and sell also. occasionally i reno and sell. just depends on the requirements of my family and my portfolio at the time.

lizzie

 

[skater]

i do all of those tactics mentioned by the others - but i did vote for buy whenever i can afford and hold until retirement, as that is my theoretical mainstay. i do buy whenever i can afford, mostly i reno and hold but i do i develop/subdivide and sell also. occasionally i reno and sell. just depends on the requirements of my family and my portfolio at the time.

lizzie

I'm with Lizzie, my main aim is to buy & hold, but I do dabble in other things as the times change, mostly reno's.

 

[quiggles]

I had problems with the "buy" part, not the sell part. I buy when I get a good deal and I sell if I get a top price and I hold if I think there's more to be made that way then I borrow and look for another good deal...

So I didn't vote.

Usefully. both for dantheman and others, I think this does demonstrate the truth that you need to remain flexible.

 

[Tikor]

Several times I've made the mistake of selling when I thought I'd made enough capital gain on the property to justify the sale. Now I only sell when I have a really good reason to, which isn't very often.

 

[thefirstbruce]

Opportunity costs always figure high in my decisions.

What I do with property is heavily contingent on what other opportunities come to mind from time to time.

I am not a Kiyosaki devotee, but didn't he talk about building businesses, then selling or having them managed, as being more lucrative than sitting on property?

I have a choice at the moment to spend $15000 on my business to cater for 1 extra employee, or to throw that $15k at a $200k property returning 8% gross yield. If I throw it at the business, it buys me an employee who can return me over $30,000 net pa. That $30k buys a lot of leverage into property.

 

[Aceyducey]

I'd prefer to put the $15K into a pre-IPO company at 50% of the listing price with the ability to sell up to my original $15K on listing.

But everyone has their own preferences

Cheers,

Aceyducey

 

[Kennethkohsg]

I'd prefer to put the $15K into a pre-IPO company at 50% of the listing price with the ability to sell up to my original $15K on listing.

Cheers,

Aceyducey

*******************************************8
Dear Aceyducey,

Please call me when such good opportunities arises. I might want to consider throwing some spare monies into them should I can afford to do so... I'm on some lookout for such pre-IPO investing opportunities, though not on a full time basis.

Thank you.


regards,
Kenneth KOH

 

[thefirstbruce]

I'd prefer to put the $15K into a pre-IPO company at 50% of the listing price with the ability to sell up to my original $15K on listing.

But everyone has their own preferences

Cheers,

Aceyducey

And Allan Kohler just made a simple and brilliant observation that this oil price boom is being driven by demand, unlike previous booms which were supply driven. He added that demand is much less likely to be volatile, as were the issues affecting supply in previous oil booms.....ergo, no chance of oil prices pulling back.....

 

[Peter 14.7]

Opportunity costs always figure high in my decisions.

What I do with property is heavily contingent on what other opportunities come to mind from time to time.

I am not a Kiyosaki devotee, but didn't he talk about building businesses, then selling or having them managed, as being more lucrative than sitting on property?

I have a choice at the moment to spend $15000 on my business to cater for 1 extra employee, or to throw that $15k at a $200k property returning 8% gross yield. If I throw it at the business, it buys me an employee who can return me over $30,000 net pa. That $30k buys a lot of leverage into property.

TFB speaks the truth again!

IMH (humble) O there are 2 types of Timing.

Yours and the Market.

Back in 1989 the market boomed. Did I want some. Yeah.
Did I have the resources at 23. Limited. I did ok but being newly wed and low income there is only so much we could do.

The secret to success is being prepared for opportunites when they come!..... be it Acey's IPO, a motivated vendor, a business expansion, a unit deal in Victoria.

Those who want to suceed in property but are still newbies should be getting the fundamentals on line NOW for the next boom.

They are:

Good Credit History
Secure Job ( yes a JOB they best security a bank will take)
Deposit or Access to Deposit via family
Saving Mentality
Defining your Market Focus

They are not:

Going to Mutiple Seminars
Reading every book on Investment
Searching for the NEXT area to boom (read WA)

And sinch iam being flippant, here IMHO is the next area to Boom......da, do dah!!! Sydney Inner City.

It always leads the pack.

Peter 147

 

[dantheman]

Hi All,

Sorry I posted just before going travelling! Just checked back.

If you do more than 1 of the options, then the last option "I have no longterm strategy and do whatever suits me that year" is the most appropriate I think.

Although the wording is wrong - if you remain flexible to the times it doesn't imply that you have "no longterm strategy", so just assume it says "I remain flexible and judge what to do at the time".

Cheers for your responses.

I agree about how you can optimise things by being flexible although I don't have enough time for all the research and like a passive Jan Somers style strategy ie never selling.
Also so many times people think the boom is over they find out a year or two later that they were too early.
That's just my thoughts. This is my first property cycle though so I'll review where I am once I get through 10 years.

Thanks

Dan

 

[Monopoly]

The secret to success is being prepared for opportunites when they come!..... be it Acey's IPO, a motivated vendor, a business expansion, a unit deal in Victoria.

Those who want to suceed in property but are still newbies should be getting the fundamentals on line NOW for the next boom.

They are:

Good Credit History
Secure Job ( yes a JOB they best security a bank will take)
Deposit or Access to Deposit via family
Saving Mentality
Defining your Market Focus

They are not:

Going to Mutiple Seminars
Reading every book on Investment
Searching for the NEXT area to boom (read WA)

Brilliant!!! Now who is speaking the truth??? Kudos to you Peter, well put!!!

I agree wholeheartedly one should make the most of the opportunities that come along, if and/when they do, and in the meantime, remember try to have some fun (it can't hurt any).

 

[Ausprop]

you need to mix things up a little. as much as I would like to build up a large property portfolio, sometimes you are crazy not to sell. I had a clean and full price offer brought to me today for one of my properties - a property that I had earmarked to forget about forever. I only told the agent I was thinking of selling yesterday - but you need to be prepared to move fast when a good deal comes your way. I can use the cash (albeit less tax) as equity for a new development and gear it up to a larger extent than let it sitting idly as dead equity in one townhouse.

 

[grubar30]

i do all of those tactics mentioned by the others - but i did vote for buy whenever i can afford and hold until retirement, as that is my theoretical mainstay.
lizzie

And it's a theoretical mainstay that in reality I personally can't seem to break....the notion of selling would mean future CG lost forever....and yes, certain forum members might call this novice/simplistic investing...

its funny though, that ppl like Spanny and the Reno Kings, for all their IP manoeuvring and wanderings, seemed to have settled on the buy and hold long-term (forever?) approach as their defining wisdom....

So in line with this, I chose the buy when I can afford and hold until retirement option....

 

[grubar30]

I can use the cash (albeit less tax) as equity for a new development and gear it up to a larger extent than let it sitting idly as dead equity in one townhouse.

As opposed to keep the townhouse and leveraging its equity?

 

[Peter 14.7]

its funny though, that ppl like Spanny and the Reno Kings, for all their IP manoeuvring and wanderings, seemed to have settled on the buy and hold long-term (forever?) approach as their defining wisdom....

QUOTE]

I think Spanny, et all, actions need to be taken in to the context of overall wealth.

I amd sure if a deal can to Peter Spann that needed equity?cash then he would sell ASAP.

He also has a theory of "shoot the dogs". That is sell non performers. I prefer to think of it as "trimming the garden". Sometimes you need to remove a pretty tree to plant a better one.

And sometome the deal is just TOO good to walk away from. No -one ever complains about taking a profit!

Peter 147

 

[grubar30]

Hi Peter147,

I see what your saying - there are instances where you might need to sell.....I guess because I havent been exposed to any yet, I can't relate that much...

Shoot the Dogs huh?...that would mean you bought poorly?....then again, maybe you bought well but the IP turned bad.....

Actually this is interesting - would any forum member be willing to share an experience of a property they thought they bought well, but later on turned bad, thereby forcing them to sell.

George