The Australian Article: Property vs Shares

Jonril

Jonril

Bit of journo fluff with a spruik at the end, or a well balanced opinion soup? My leaning is to A)

Class Divide: Property vs Shares

"It's right up there with Ford v Holden, Carlton v Collingwood, league v union: are shares a better investment than residential property?..."

Personal disclaimer: I sold out my share portfolio for an engagement ring (best investment ever made :p ) Currently have two IP's (negatively geared)

For me it is a decision between who will rip me off less. Dodgy CEO's or dodgy PM's I figure I have a better chance with the dodgy PM's
 
In the 2010 report -- for the 10 and 20-year periods ended December 2009 -- Russell found that residential investment property achieved the highest return (before tax, after costs) of 10.4 per cent a year for the 10-year period, while Australian shares returned 8.4 per cent a year.
Click to expand...
Both have been outperformed by physical Gold for the last 10 years:
http://goldmoney.com/commentary-gold-shines-for-the-ninth-consecutive-year.html

No need to rely on dodgy PMs or CEOs.

Suspect this trend will cotinue for the short to medium term.
 
dtraeger2k said:
I assume because he's trying to get away from full time work as opposed to creating more of it. Of course finding a better PM would be ideal :p
Click to expand...

Correct.

I don't mind MYOB'ing, but I prefer to do the counting money in the bank part and finding the next deal, while delegating the grunt work. (I've done enough grunt work in my J.O.B)

Back on topic, I find that shares and RIP's are the baby steps of the investment world. Once you are off the training wheels you can start managing risk on bigger deals.

Getting to the bigger deals I believe takes ambition perseverance and perspiration. (something I have to work on :p)

As far as one investment over another, I don't see why you should limit yourself. Do whatever works.
 
DEC said:
Physical Gold has under performed leveraged property for the past 10 years and tenants pay rent for my property (yield).
What's the yield on gold?
Click to expand...
There are plenty of ways that one can leverage into Gold, although probably a lot more dangerous than doing so with property due to margin calls, whipsawing action in short term price, etc.

We can't just measure the two assets on even ground? I find it amusing that you have to change the rules for property to do better :rolleyes:

Doesn't need a yield when the CG is higher than properties total return after costs.
 
Perth Investor said:
You can buy gold with CFD's on a 1% deposit, you can 't even leverage property that much...
Click to expand...

How exactly does short term trading in gold compare to long term investing in property? Or are you saying investors should borrow 99% and hold for 10 years? What is the strategy here?
 
hobo-jo said:
I find it amusing that you have to change the rules for property to do better :rolleyes:
Click to expand...

You have changed the rules by taking a short term look at gold.

Perhaps a comparison on what a house in Melbourne in 1981 in gold value compared to today would be a better view.

Melb. house 1981 $44,000
http://docs.google.com/viewer?a=v&q...aeFJQZ&sig=AHIEtbRDMHVK7SAjTBdOX24XNHxkdKHVOQ

Buys 157 oz. of gold @ $280 usd/oz
http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx
aud-usd rate approx $0.87 like today
http://www.tititudorancea.com/z/fx_usd_19800530.htm

Today, your gold is worth $200,000 approx.
What is the median house in Melbourne worth, twice that?

Doesn't need a yield when the CG is higher than properties total return after costs.
Click to expand...

See above
 
Hi all,

The last time we had one of these debates, I can remember bringing up yields on the property as being very important.

Going back even further than DEC, if you had bought a property for $10,000 in 1972 (cash) and spent all the yield on buying gold (after allowing for tax), you would have more gold now than if you had bought $10,000 worth of gold in 1972.
Plus of course you would still own the property.

bye
 
.toe said:
How exactly does short term trading in gold compare to long term investing in property? Or are you saying investors should borrow 99% and hold for 10 years? What is the strategy here?
Click to expand...

I didn't say anything about a strategy or how it compares or anything like that at all. All I said was:

You can buy gold with CFD's on a 1% deposit, you can 't even leverage property that much...

I wouldn't do it, but if someone wants to they can, that's all.

But here's the point: I don't believe we should be comparing leveraged property to unleveraged anything, because where capital prices increase the unleveraged anything is sure to lose, and it makes it a pointless discussion.

Which incidentally is why I spend most of my capital buying property at 90% LVR, and not buying shares, because I don't have the risk appetite for a margin call. So if I have $50K to spend I can buy a property for $330K, or I can buy $50K worth of shares. Unless the shares increase at 6X the property, property wins. As I'm not prepared to risk a margin call, and don't quite have the spare capital to get into shares in a meaningful way, then I keep buying houses.
 
DEC said:
You have changed the rules by taking a short term look at gold.

Perhaps a comparison on what a house in Melbourne in 1981 in gold value compared to today would be a better view.
Click to expand...
The original article compared shares vs property over 10 and 20 years, I didn't change any rules, I just compared 1 timeframe (by the way I'd hardly call 10 years "short term"), I think we can both agree that:
- Gold performed better than property over the last 10 years
- Property has performed better than Gold over the last 20 years

End of the day, who cares? What really matters is what it will do for the next 5, 10, 20 years. IMO Gold will out perform property for the next 5 years, possibly the next 10, over 20 years from now property should be back in front. If you don't actively manage your investments then property might be the way to go if you have a 15-20 year+ timeframe, however if you are prepared to look at other opportunies there are certainly some better ones than property on a medium term outlook in my opinion.

Life is short, I don't want my capital wasting away in a poorly performing asset.

I have tabled and charted some interesting Gold/Housing data recently, I'm currently writing an article to go with it, will be sure to post it here at some stage. All capital house medians except for Sydney were able to be purchased with less than 100 ounces of Gold in 1980 (average price over the year, not on the spike), I suspect we will see the same by the peak of the Gold bull market.
 
dtraeger2k said:
How many people had $10K in cash in 1972? :p
Click to expand...

that's about 3 luxury car's worth of cash.

and i say, who cares with vs arguments.

some are happy with the risk/returns for one, others for another. these versus arguments are for toffee nosed snots who like to argue about such crap over ruining a good meal.
 
Aaron Sice said:
that's about 3 luxury car's worth of cash.
Click to expand...

My parents put in a "cement pond" in 1972 and I have a dim memory that it cost around $3K (but could be very wrong). Anybody else know?

I'm only curious because of the comment about three luxury cars' worth of cash.
 
You must log in or register to reply here.

Similar threads

B
Dream to be Comfortable not Rich. Start Now!
2
Replies
33
Views
7K
ChrisA1
C
redwing
Where are the bargain properties?
Replies
4
Views
3K
jaycee
jaycee
Sunstone
New Billboard Advertising Articles -Property Council of Australia
Replies
0
Views
6K
Sunstone
Sunstone
Back
Top