Thank God, I’m a Property Investor
Ok, so I don’t normally invoke religion when talking about Property Investing. However, give me 4 minutes to explain something fundamental to your financial future!
There is an old adage in economics that says, the greater the volatility and risk, the greater the reward.
Well, I think that can be thrown out the window.
The share market in 2016 has been more volatile and unstable than a crack head looking for his next fix (I love that expression 🙂 ) In fact, the share market has been bouncing around all over the place for the last few years.
So does that mean, investors who are diversifying and investing for the long term are making more money on the share market? That’s what should happen according to theory…
Well let’s see.
Research published in the Australian Financial Review shows the major S&P ASX 200 index (which is an index of the top 200 companies on Australia’s stock exchange), today June 21, 2016 is sitting at around 5,270.
In June, 2015, it was at… oh around 5,270
And in June, 2014… 5,270!
In fact, it was sitting at around about this point, back in April 2016!!!
So in 10 years, shares have not really gone anywhere. In other words, you’ve probably MADE NO MONEY! In fact, when you consider inflation over the last 10 years, you’ve actually gone backwards.
Oh sure, there have been times when the index has been higher, but then again, there have also been times when it’s been a whole lot lower. However, the next effect is that in 10 years, ZERO GAIN!! But with a whole lot more volatility and risk thrown in…
Are you relying on the share market to take care of your financial future? If so, all I can say is Good Luck!
I hope you’re an advanced investor who can pick the good stocks, especially when you consider all of the factors out of your control such a new US President (who knows what that will bring) and potential fears about the exit of Britain from the European Union, plus so much more.
Compare all of that how much property prices have risen in Sydney and Melbourne in the last couple of years…
And that does not include being able to leverage and then use equity to leapfrog into additional properties (so you don’t need to put your own money in!)
Of course, not every market is great. In fact, the apartment markets of Sydney and Melbourne are looking highly dangerous right now. Even if prices correct in those markets, the properties won’t be worth zero though!
However a share can be worth zero overnight. Puff! And you’ve lost all your money.
So do your research when it comes to investing in property. Get the right advice (as I always say, Property Investing is a team sport!) but all things considered, all I can say is:
“Thank God I’m a Property Investor!”
Would my fellow property investors give me an “Amen”?
PS: I got an rude response from someone who was clearly a Sharemarket enthusiast. It has since been deleted (Disagreeing with me is fine but be polite!) but it just shows that many people will do anything to hold onto their opinion but the facts don’t lie!
November 13, 2020
November 4, 2020