Property vs Shares - any regrets?

[MPmelb]

Does anybody have regrets about getting into property rather than putting most of their money into the sharemarket?

I used to own shares but switched fully into property wealth strategy after the tech bust of 2000. Have seen the share market boom the last 2 years as the property market has been flat/falling.

(1 share I had was Macqaurie Bank - bought it at $8, sold at $20, today worth $80 and climbing fast!)

I now own 3 properties in Melb., am highly geared, and am struggling to make the repayments, and looks like I will not be able to afford any more as the equity value has been flat for 2+ years.

Interested in other people's thoughts on this matter.

 

[Panic]

I regret for not getting into more property few years ago, mainly in Europe, and I also regret not getting into the share market earlier.

We always regret about something, be it a car, a holiday...etc.

The point is what we learn out of our mistakes and how it makes us better investors.

One thing that I learned is not to be rigid, and not to overanalyze (paralyses by analyses).

I guess what you have learned is that switching completely from asset group to asset group is not very profitable, and mainly due to the fact that you were overtaken by mass mentality. (There is another thread on mass mentality)

Diversification, but you already know that.

Thx
V

 

[ponyfire]

Hi MPMelb
I think the keys to all investing is 'knowledge' and 'long term'.

If you know a lot about one field I believe it is wise to stick with that area but employ a strategy that allows you to ride out the downturns. Everything goes in cycles.

A little diversification doesn't hurt but if you don't personally have the knowledge it is hard to know whose advice to rely on.

Part of what I do is produce quality family friendly ponies and horses. During the drought (which is actually still with us, just not so severe) I had to sell off my stock at breakeven but I kept one youngster, my knowledge telling me he was going to be special. Because of the drought, though, he had to become a long term project, he has now quadrupled my investment and will sell next year at probably 10 times my investment.
My point being I used my knowledge and willingness to look at the long-term gain.

I also bought some shares about the same time, they have gone up too but still not as good as property or the horse! However, the bonus is they are always there as a safety net that can be sold to cover property shortfall.

Did you buy when Melbourne was on the up?
We are buying in Melbourne and Sydney now, looking at the long term CG.

My thoughts only,
Pony

 

[keithj]

Does anybody have regrets about getting into property rather than putting most of their money into the sharemarket?

I used to own shares but switched fully into property wealth strategy after the tech bust of 2000. Have seen the share market boom the last 2 years as the property market has been flat/falling.

(1 share I had was Macqaurie Bank - bought it at $8, sold at $20, today worth $80 and climbing fast!)

I now own 3 properties in Melb., am highly geared, and am struggling to make the repayments, and looks like I will not be able to afford any more as the equity value has been flat for 2+ years.

Interested in other people's thoughts on this matter.

Life is full of regrets. I too regret selling out of MBL. I regret not buying more IP in 2000. I regret not selling all IP in Oct 2003. I regret not maxxing out the margin loan in early 2003. I've got lots of regrets about not achieving 'the perfect asset allocation'.

But looking at the big picture, it's impossible to achieve 'the perfect trade'.

If you balance up your regrets and the achievements - (150% gain in MBL & 3 IPs with equity), I'd say you're ahead of 99% of the population.

 

[MichaelW]

Nice post KeithJ!

I agree with the point you're making completely. I regret not leveraging heavily into property in the mid 90's and I regret not being highly geared in shares since about 2000. But even without either my net worth is still just nudging the $1M mark.

I've decided the best approach is to be balanced so will heavily gear into both classes and then wait and watch while hopefully at least one of them is performing for me at any point in time.

Cheers,
Michael.

 

[MarkB]

<gloves off>


Property vs Shares - any regrets?

If you want to talk about "regrets" in investing, or in life, I suggest you vent yourself at www.haveawhinge.com.au.

However, if you want to discuss the lessons learned in pursuing or not pursuing one course of action over another, then stick around.

<gloves back on>


I can be nice again, now.

Mark

 

[alexlee]

Personally, I think regrets are useless. Might as well analyse the experience, learn what you can, and make sure you recognise whatever it is you missed the next time. I looked at Solution 6 when it was trading at 6 cents at uni, didn't buy any.... the stock went up to $18 at the peak!

You'll never pick the top and bottom of any market. If you gear too heavily into the boom you'll be killed in the bust. I think long term wealth is built by steady buying and not to over-commit yourself so that you can take advantage of drops.

 

[topcropper]

Some very sensible replies here.

I have no regrets. Gearing into property is a great method of wealth creation. I managed to build up some nice assets as a result.

There's no way I would have geared into shares in any way like the way I have into property, I just wouldn't do it. Too many risks, plus the bank would not allow it.

Therefore, I wouldn't be in the situation I am now if I hadn't of geared into property. Simple answer.

See ya's.

 

[PEI]

Sounds like the temptation to invest in the boom and offload in the decline. What would have happened instead of selling or getting out of the share market in the crash of 2000 you had of re-invested in solid companies? Selling in the downturn and investing in something else that is at the boom sounds like a recipe for disaster. I bet there is a lot of people know thinking about dumping their property and jumping back into shares which are booming and over valued at the moment (AUST).

Personally I will hold to property as my main investment vehicle for the long term and invest in shares when I can afford from my properties.

Keep with the cycle and invest for the long term and hold fast.

 

[The Y-man]

Does anybody have regrets about getting into property rather than putting most of their money into the sharemarket?

I used to own shares but switched fully into property wealth strategy after the tech bust of 2000. Have seen the share market boom the last 2 years as the property market has been flat/falling.

(1 share I had was Macqaurie Bank - bought it at $8, sold at $20, today worth $80 and climbing fast!)

I now own 3 properties in Melb., am highly geared, and am struggling to make the repayments, and looks like I will not be able to afford any more as the equity value has been flat for 2+ years.

Interested in other people's thoughts on this matter.

We too had a similar experience, but overall quite positive..... (lucky maybe?)

We too had shares (mainly in managed funds) which we cashed in during 2000 to move into property. By 2003, we pretty much hit the serviceability limit, but we used the available equity (which had grown between 2000-2003) in the IP's to buy shares again. Between 2003 and now, shares have been going great guns.

This has meant the flat equity has had little affect, and the heavy negative gearing has been offset by income from shares.

So far from regretting it, we are quite happy at using the 2~3 years of cap growth in property, to make larger investments in shares.

Cheers,

The Y-man

 

[The Y-man]

am highly geared, and am struggling to make the repayments....

MPMelb,

Just curious about this statement - have you suffered a change in circumstances (eg employment), or did the banks actually lend money to you beyond your serviceability? I would have thought their serviceability calculations were quite conservative, so that you shouldn't be in a position to struggle with repayments without suffering a massive downshift in income.

Cheers,

The Y-man

 

[gekko_99]

I think if you did something and made money then you can't regret anything; even if you lost money it's a leaning experience and your less likely to do that again which is better than someone who never copped a loss - depending on how bad it is. The best option for anything can alway be found after it happens, everyone has 20-20 vision in hind sight.

I'm still learning and could've done better in a number of areas but I know that because of what I've done and I hope I won't make those mistakes again.

If I stood on the sideliness, did nothing, made no profit and learnt nothing - I'd regret that.

 

[Glenn]

Part of what I do is produce quality family friendly ponies and horses. During the drought (which is actually still with us, just not so severe) I had to sell off my stock at breakeven but I kept one youngster, my knowledge telling me he was going to be special. Because of the drought, though, he had to become a long term project, he has now quadrupled my investment and will sell next year at probably 10 times my investment.
My point being I used my knowledge and willingness to look at the long-term gain.

I also bought some shares about the same time, they have gone up too but still not as good as property or the horse!
Pony

Hi Ponyfire,

I loved your story about the horse that you kept during the drought, knowing that it would be a good investment for you in the future. You used your knowledge gained through your day to day job to reduce your risk and increase gains in that particular asset\asset class. This is one of the things that is discussed in "The Richest Man in Babylon".

Since 1992, I have worked on and off @ Burswood casino. When Crown Casino was having negative price pressure in the late 90's, myself and a few workmates bought Crown Casino shares between 26c and 30c, being bought out by PBL for a handsome profit later. Similarly, I am accumulating PBL shares now and look forward to the day when the market realises that they are a very well managed gaming business.

Glenn

 

[MPmelb]

MPMelb,

Just curious about this statement - have you suffered a change in circumstances (eg employment), or did the banks actually lend money to you beyond your serviceability? I would have thought their serviceability calculations were quite conservative, so that you shouldn't be in a position to struggle with repayments without suffering a massive downshift in income.

Cheers,

The Y-man

I'm in Sales and had some work problems which really affected my income levels. I've basically been struggling all year to maintain all the repayments an expenses associated with IP's, but things are back on track, sort of, now - hopefully.