Invest in the Stock Market?
Specialising in Investment Property, I often get asked the question “why not just invest in shares?” On researching the question, which is a very legitimate question, I have come across differing opinions from so called industry experts. These experts on both sides (shares and property) unfortunately do not elaborate on their own personal circumstances but remain industry generic
A recent article released by Residex tells us that : “shares have performed quite well, with total growth in the S & P Top 200 of around 16%, compared to houses units at around 10%. The problem is that shares have fallen in value by over 15% in the last two years and are now nearly 30% lower than their peak three years ago.* Houses on the other hand have grown in value over the last three years by 18% and units by 20%. The last year has also seen some housing markets recording extraordinary high growth …”
Further research in speaking directly with peers that I am networked with tend to provide an answer that balances out the investment objectives of my peers Objectives include :
- Risk Profile for the particular investment
- Investment Strategy Time Frame
- Amount of their Investment Budget
- After tax cash flow
- Advice received from industry specific professionals
- Investment Strategy
- The Purpose of the Investment
Having taken the above into consideration we fully understand that investing in property is by no means a short term investment. We also understand that compared to the share market, the risk is minimal to none over at least a 10 year period. (fyi – Given any period of time, property has always doubled it’s value over the 10 years). One does not require to monitor a property investment as one does with a share portfolio.
There are no ongoing commissions being paid to the stock broker to trade the portfolio as and when market conditions are ‘guestimated’ to change. If you invest at the wrong time in shares you stand the risk of having bought too high and the risk of not achieving any capital growth on these shares. Unfortunately the majority of stock market investors often throw a whole lot of money all at once at a particular hot tip and now rely on that particular company to grow – or their investment suffers accordingly. Share trading is reliant on many external factors which determine the risk of your investment I might come across as anti-share, please don’t get me wrong because there are a lot of successful stock market investors who have made healthy profits and continue to do so … yet these same investors also own a lot of property!
This blog is in no ways offering advice as to which way you should structure your investments, but merely to provide some food for thought so that your own research and investment advisor helps lead you towards your own Investment Goals and Strategy. Does this make sense?
Research undertaken depicts a trend of balancing one’s own portfolio in line with your own particular circumstances, goals, objectives and risk profile. What I can share with you is that given any 10 year period, the value of Property has always doubled. The official figures provided, support this statement.
“Have your other investments achieved the same results?” If not, then the balance (according to the financial advisors who are fee based) will need to be rectified in accordance with your own personal objectives and desired outcomes Just as you would aspire to build a share portfolio, market intelligence demonstrates that successful individuals also build up a healthy property portfolio.
Based on the fundamentals of today; it is probable to say that “never in most of our lifetimes are we sitting at the edge of an opportunity to dramatically enhance our personal wealth through investing in property.
Right now today, you and I are exceedingly well postitioned to put in place a strategy to ensure financial freedom for ourselves and our children … as other previously successful Australians have done through the purchase of property!
“If the likes of any of the top 20% of highly successful entrepreneurial Australian families all own a property portfolio; surely this is no brainer and we should all be following in their footsteps and investment strategy?