Shares Vs Property

[Croc Dundee]

I dont know if this topic has been done to death (link pls if it has)...But

..Can you imagine a Westfield shareholder waking up this morning to the news that his shareholding had just been.

1) Diluted to the tune of 2.6billion dollars in an Institutional Share Placement.
2) And to have those shares sold at some 10% under the latest market price.

This cant happen to you with an IP portfolio.

 

[nww]

Try having Qantas as well.
Down 40 cents at present(20%) after the lifting of the trading halt.

Shares can be great in good times, due to my share portfolio I have been able to pay off all my 5 IP's during the last few years but still you feel bad being hit hard when you look at your daily losses.
I have not been game to look at my share portfolio for 6 months now.

 

[BayView]

It has been done to death, but in the hands of someone educated and using a safe risk profile, both are good vehicles for investment.

Personally, I prefer property because there are a few more factors that give you better control and the opportunity to increase the return; such as tax benefits, add value, sub division etc.

For me, the perennial threat of a market crash (as we've just seen) is a turn-off, because I don't have the shares education to know how to mitigate that risk and even make money during a crash. No doubt there are some that can of course.

Ultimately it comes back to your education, and I think whichever vehicle you select, you need to become an expert of sorts at it and you should do ok.

 

[JamesGG]

Hiya,

I'm up a shade over 16% in shares so far this calendar year, short-term trading only. Although, I don't hold any Westfield or Qantas; enjoying BHP and NCM today.

As Marc suggested, anything can make you money if used properly. Except maybe emu farms? The shares vs property debate has indeed been done to death, and I think arguing a point either way ignores the fact that each of us have our own preferences and risk profiles. To each his (or her) own, hey?

Cheers

James.

 

[BayView]

On this note; has anyone made any money in shares in the last 12 months, and if so, what was your strategy?

 

[willair]

On this note; has anyone made any money in shares in the last 12 months, and if so, what was your strategy?

Quite simple what i do is watch up to 25-40 ASX listed companies, understand the company history,the price,the div's,the companies longterm performance is of lesser importance,short term 3-5 day trades seem to pay good returns,i"m still a lot behind FROM SEVERAL"BANKS" but this year has been good so far,i held a small number of "bnb" that went from 9 cents entry price then sold at various points from 43 cents down to 37 cent two days later they went into lockdown on the ASX,so that trade was good in dollar terms,property- shares work both the same, i had all the properties valued over the past few weeks and what i have lost shorterm on the ASX, the properties have covered that loss..imho..willair..

 

[MarkB]

This cant happen to you with an IP portfolio.

At some level it can.

Ok, so maybe some higher power isn't going to come along and sell off part of your IP at a 10% discount to current value, but on a wider level when you buy an IP you don't just invest in that specific piece of bricks and mortar, you also invest in the location.

New subdivisions and developments can dilute your "investment" in said location by increasing the supply of property in the area, and you've no influence at all over the price of those.

 

[topcropper]

shares v property.

After whats happened in the last 15 months, the bloke who still argues that shares are the best investment vehicle reminds me of that medievil monty-python 'black knight' who has had his arms and legs cut off, but still wants to fight on.




........."Arthur: Now stand aside, worthy adversary.
Black Knight: 'Tis but a scratch.
Arthur: A scratch? Your arm's off!
Black Knight: No, it isn't.
Arthur: Well, what's that then?
Black Knight: I've had worse.
Arthur: You liar!
-Arthur and Black Knight"...........




So property is the best investment class. Even I will admit that now, and I've been on plenty of arguments in favour of shares.



However. Going forward. It's no secret I'm a bear now. Lets compare property and shares in a few years time after this mess gets played out. Shares are a leading indicator, property a trailing one.

Shares predicted this disaster and have suffered accordingly, but it's still being played out in the rest of the economy. Anyone who was 50% geared into shares has been wiped out. But gearing in property is generally higher. Someone 80% geared into property, and we see 20% drops, will also be wiped out.



Lets compare shares and property in a few years time when everything has settled down, rather than now. I'm confident property will still win, and especially at the cheaper end, but 20% drops could easily happen across the board and I hope it doesn't, but nobody knows how bad things will get and Australia is not going to miss out on the fun.

I've just bought a unit in Sydney too as part of a farm succession plan with my rural hating brother.

See ya's.

 

[Hoffy]

shares v property.


So property is the best investment class. Even I will admit that now, and I've been on plenty of arguments in favour of shares.

Some segments of the property investment class have been horrendous - far worse than "shares". I presume you mean residential property?

 

[topcropper]

Some segments of the property investment class have been horrendous - far worse than "shares". I presume you mean residential property?

Yep.

To fill up space just add some dots..........

See ya's.

 

[chilliaa]

shares v property.

After whats happened in the last 15 months, the bloke who still argues that shares are the best investment vehicle reminds me of that medievil monty-python 'black knight' who has had his arms and legs cut off, but still wants to fight on.




........."Arthur: Now stand aside, worthy adversary.
Black Knight: 'Tis but a scratch.
Arthur: A scratch? Your arm's off!
Black Knight: No, it isn't.
Arthur: Well, what's that then?
Black Knight: I've had worse.
Arthur: You liar!
-Arthur and Black Knight"...........




So property is the best investment class. Even I will admit that now, and I've been on plenty of arguments in favour of shares.



However. Going forward. It's no secret I'm a bear now. Lets compare property and shares in a few years time after this mess gets played out. Shares are a leading indicator, property a trailing one.

Shares predicted this disaster and have suffered accordingly, but it's still being played out in the rest of the economy. Anyone who was 50% geared into shares has been wiped out. But gearing in property is generally higher. Someone 80% geared into property, and we see 20% drops, will also be wiped outonly if they are using margin lending and become a forced seller, otherwise your equity at current market price is wiped out, your investment is not wiped out if you dont sell and you are not forced to sell..



Lets compare shares and property in a few years time when everything has settled down, rather than now. I'm confident property will still win, and especially at the cheaper end, but 20% drops could easily happen across the board and I hope it doesn't, but nobody knows how bad things will get and Australia is not going to miss out on the fun.

I've just bought a unit in Sydney too as part of a farm succession plan with my rural hating brother.

See ya's.

I love these sought of posts, people always reactive to near term data bias when making their investment decisions. I wonder how US investors with exposure to residential property in florida or Laz vagas apartments are comparing the share vs property argument

My portfolio of australian shares is up some 20% from its november lows, the current market price is around $900k and the gross dividends are around $105,000. I have a property portfolio that has a market price of around $2.1 million with net rent of around $89k.

 

[MarkB]

So property is the best investment class. Even I will admit that now, and I've been on plenty of arguments in favour of shares.

I love these sought of posts, people always reactive to near term data bias when making their investment decisions.

I don't so much mind the short term bias, as I think it is natural at times like this (though your comments re: Las Vegas property and my own recent experiences re: property do illustrate to me that property has limitations).

It's a blanket statement that cannot be made - at least not in that form.

I have direct / indirect responsibility for tens of millions of dollars of investments for dozens of clients.

Imo and experience there's no single "best investment class", we're all different and the trick is to match the peg with the hole it fits in.

 

[buzzlightyear]

With shares, at least when starting out, you can invest a small amount of money (eg couple 000) and add to it as and when you can.

 

[evand]

There's no problem losing money with shares. As long as you make more.
If i dropped $250k in a year and made $500k i'd be pretty happy with that. Wouldn't you?

With shares you have to accept some losses across your portfolio. You use risk management strategies to limit losses. (diversify, stop loss, etc)

I reckon if peoples' house prices were seen on the news every night they might be in for a bit of surprise. (i'm talking about the price they'd get if they placed it on the market that day and what someone would be willing to pay in the current market)

By the way...there are so many pros & cons to shares and property, its a dud argument. You cant compare them directly. Just have both.

 

[Propertunity]

By the way...there are so many pros & cons to shares and property, its a dud argument. You cant compare them directly. Just have both.

Here! here!

 

[chilliaa]

I don't so much mind the short term bias, as I think it is natural at times like this (though your comments re: Las Vegas property and my own recent experiences re: property do illustrate to me that property has limitations).

It's a blanket statement that cannot be made - at least not in that form.

I have direct / indirect responsibility for tens of millions of dollars of investments for dozens of clients.

Imo and experience there's no single "best investment class", we're all different and the trick is to match the peg with the hole it fits in.

The point is BOTH shares and property are cyclical investments they each go through cycles. There is a reason for such adages (spelling?) as property must be held for at least one cycle, or dont invest in shares unless you are happy to tie up your money for at least 5yrs.

At the moment residential property has and on a relative basis is still having its day in the sun, but there will be a point in time where it goes into the dog box. Shares on the other hand are in their cyclical trough (whether the low i have no idea and neither does anyone else).

However if you step back both asset classes have shown decent performance over the long time. The reason shares out perform (and only over very long periods of time) is because of their inherent higher risk (hence why banks will only lend against shares with products such as margin loan accounts). Higher risk higher return, but too many people, because of recent data bias, forgot that shares are a higher risk return, they looked at recent history and incorrectly thought they can extropolate those recent (abnormally high returns) into the future.

PS thanks TOPCROPPER, for your recent views on fertiliser prices and IPL, keep me away from the recent downgrades

 

[Sunfish]

There is another investment which showed at least 25% gains in '08, X3 in 5 years and I see little risk that it won't have another good year in '09.

It is safe in both depresionry and inflationary times. It is the only investment class I am likely to make this year.

 

[JamesGG]

There is another investment which showed at least 25% gains in '08, X3 in 5 years and I see little risk that it won't have another good year in '09.

It is safe in both depresionry and inflationary times. It is the only investment class I am likely to make this year.

Hiya,

And what yield does it have, mate?

Cheers

James.


PS - Ok, so I like gold too. But it's not part of my current strategy for a variety of reasons.

 

[MarkB]

PS - Ok, so I like gold too.

So do I.

My wedding ring and my watch.

If people want to invest in gold that is their business and the first thing I say is all power and good luck to them.

The 2nd and last thing I say is (as with any investment), go into it with your eyes wide open.




Gold does have it's days, it's months, it's years and even it's decades.

But it also has it's abysses as well, and they can go on for months, years, decades too.

Originally posted here.

What that graph says is:

• There are times when Gold is a spectacular investment, but:
• Gold was a dud investment from 1600 to 1800 inclusive
• Gold was a dud investment from ~1940 to ~1970
• Gold was a dud investment from ~1980 to ~2000

They're all significant periods of time.

So if you buy gold remember, it could make your fortune in 5 months, or take you 50 years to break even.



In case you hadn't noticed... look at the last 8 years...

Taken from here.

Moral of the story with gold.

You can make a fortune in a short period of time.

But you can also have to wait decades to get your money back.

 

[BoatBoy]

There is another investment which showed at least 25% gains in '08, X3 in 5 years and I see little risk that it won't have another good year in '09.

It is safe in both depresionry and inflationary times. It is the only investment class I am likely to make this year.

Have you realised those gains yet or at least been able to get a LOC against them?

Hope your not being guilty of this, as we all have been from time to time

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when youre sittin at the table.
Therell be time enough for countin when the dealins done.

Dave