Will Investment funds return to property soon?

[jsh1]

Hi all,

I have read many posts on this excellent forum, but rarely posted.

I am however interested in the following facts if anyone would care to comment.

Unless I am mistaken most people invest their funds primarily in Property, Shares or Term deposits/bonds etc., depending on which they feel will offer the best returns.

1. Property has experienced very strong growth until recently,with the media reporting it is due for a retrace or worse.

2. The Sharemarket has recently undergone a meteoric rise to record levels, with many market analysts now saying it can't be sustained and at best will flatten out or retrace.

3. Term deposits/Bonds are currently offering very low returns and are not expected to improve much with record high World Oil prices foreseen for quite some time.

My question are these:

Where will investors turn given these circumstances ?

Could the property market see further activity and growth given these circumstances?

All comments would be appreciated.

JSH1
--------------------------------
"Always expect the unexpected."

 

[qaz]

Maybe energy and resources stocks like oil and silver.

 

[Brenda Irwin]

Hasn't it been said that every action has an equal and opposite reaction. Clever investors know how to create a buffer to be able ride out the down times.

 

[likewow]

Investors will only return to property in large numbers when yields improve. As with most professional investors the cost of holding the asset (interest payments) compared to the return (yield) are the fundamental reason for investing and cap. growth is secondary.

Thats not to say all professional investors are +ve cashflow investors, its just that the yield is very imortant regardless of the asset class, even more so in the uncertain and relatively low growth period we are heading into for property.

So, in a nutshell in 2-3 years when the current cycle bottoms out, yields increase and the property upswing starts again. Other opinions?

 

[Aceyducey]

JSH1,

Taking a 'reading' from the forum & other forums of late:

There's been recent upswings in talk about going into businesses, with many specifically mentioning franchises.

There's been much greater interest in share trading. You can make money from shares at any time using the appropriate tools - and a downward share market doesn't mean that all shares are headed down.

Commodities & energy (partially my fault) have also had more time, with a bit of futures thrown in.

Looking back in time:
First half of this year the number of people looking to do renos increased & there was a lot of interest in the NZ market & even further flung (UK, Canada, US, Europe). This seems to be over though.

BTW: The media and experts are rarely right. In fact there have been a couple of studies that have shown that flipping a coin can give you more prospect of being correct than listing to an expert in an investment class. Doing your own research is always vital (and I'd recommend don't use the coin toss approach).


Hey Sim, is it possible for you to create the Somersoft investment index?

Do a tally on the number of times specific words turn up each month in the forum....

ie: Property, negative-geared, positive-geared, New Zealand property, shares, commodities, futures, business, franchise, franchising, etc

Could show some interesting trends

Cheers,

Aceyducey

 

[jsh1]

Thank you to all that responded

Thanks to all for the responses given.
JSH1

 

[Garry K]

Hi HSH1

The thing is, no one knows for sure what "markets" will do in the future.

Even if all the indicators point in one direction, doesn't mean it's going to happen.

Following trends can help. Buying property now would seem to be at the peak of current trend, depending on which town you are talking about.

I don't consider the property v shares question to be an either/or question. Both can work fine together.

Within any market, property or shares there are always opportunities. Sometimes they are harder to find. With property, you are generally relying on one investment to get it right. With shares this is potentially more dangerous, but you can diversify easily, buying more than one share.

Which ever way you go, you need to do your numbers, get educated.

Garryk