How are we doing? Advice sought.

Buying in a bull market is not an edge. Getting access to deals before they hit the market is. There are also other ways to get an edge. Most ppl who buy real estate dont have an edge. Doesn't mean they won't do well well though .

 

awesome forum

exactly.. that edge dont mean that much...the edge is more that you dotn get in a dodgy deal during a bull market!!

 

Sure,whatever that floats your boat and your risk profile. I am talking from my own experience and witnessed many ex-colleagues who had to return to work after retirement after the ASX crush in 2006. because they have lost half of their money in the share market in the form of super or otherwise. Statistically speaking, property investment are far the safer bet for the average Joe, but by no means fool proof.

 

and its back up to 6200 points now..2006 crash was under 4000.. ?

if he double down he would have made at least 50%.

also with the exception of he dumping his entire super in 2005. he would made money all the way. up to 2006, and it recovered back in 2010.

and this is just index.
i dont think his super would dump everything in one index.
many companies recover much faster.

cba and other big 4 + telstra recovered in 12 months.. most super hold these shares.. 12 months wait. big deal ?

 

Buying and doing well in a bull market is one thing.

Then buying deals (using various methods) before the market has access to them (in any market) is a totally different story.

Also, not everyone does equally well in bull markets. Far from it. There are ways to increase your 'odds' of buying RE which outperforms other types of RE and other areas during the same bull market.

 

There is actually a thread on the bogleheads forum from the GFC. Those guys only invest in index funds. It is fascinating reading.

There is a guy who is like 40 with near 2mil in the market. It follows his thought process. He basically went from 2mil to 1.2 mil overnight. He doesn’t know how to tell his wife. Then he decides he has been investing like this his whole life and has to stay the course. So he actually increases his investment. The guy has over 6mil now according to recent posts. Fascinating reading. Do you have the balls to hold in a downturn.?

That forum is worth a read. They discuss downturn and what to do a lot.

 

Thats interesting, certainly will have a look, amount people in my family and friends circle, I have yet to see any one make real coins in the share market, most have stopped talking about it after few years of mediocre results at best. Assuming that either they gave up or feeling embarrassed about it. I know a few who made serious fortune through properties though.

 

There is a lot more people on that forum with more money than here. Different user base. But still

 

No doubt there are lots of people out there that are make serious money from Shares, just that I hasn't came across a share millionaire from the people I know and there are quite a few that was quite active in the share market for a number of years but made nothing significant if they didn't lost money.

I think it comes down to simple math.
If you have a 100k to invest. With property investment you would mostly likely to borrow another 400k to buy a 500k house. For share investment, the vast majority would just use the 100k and will not leverage as it is highly risky to do so. For your initial investment to double, the one with property investment will just needed 20% growth from 500k to 600k to get there, whereas with shares you will need a 100% gain from combine of growth and dividend to get there.

Just think about it, how many shares that has gained 100% within 4 years? now how about properties with 20% growth in the last 4 years?

In fact, there are higher percentage of properties gaining 100% than propotion of shares. That's 4 times more return than shares.

 

You have your right to that opinion. Having said that if you read the forum you would find 95% of the people there think you are wrong. They agree leverage can speed up results. But they also believe leverage is a good way for a rich man to become poor.

The reason being. Sydney prices look to be down 8% on the year. If you leveraged a 500k house you have lost 40k. How many index funds can you find that lost 40% in nine months? None really. Most are up 8%.

Those guys basically believe invest 1-2k each month. Get 7-9% returns per year. for example. Start with 100k. Invest 2k a month. In near 20 years you will have a couple million. The hard part is staying the course. Once you get the first million that way, they say basically it takes on a life of its own.

 

Ohh and as a side note. I don’t view shares more risky than houses. I think they are a more efficient market. So more volatile. Ups faster and downs faster. But long term risk is the same in my mind.

Use a mix of index funds, bonds and fixed income is pretty safe.

The only difference is that shares are valued each day, so you can get margin called. Houses can be defaulted, but that’s harder to get to.

But I’m more of a limited leverage guy.

If you go to that forum they have a net worth survey. It’s anonymous. People have absolutely loads from investing there.

 

Sure, thats a share trading forum so no surprise, that's what my share investment friends told me that too.
I bet 95% of the people here disagree with you on shares being a safer option.

On your view that shares are safer option. Here is an idea. Maybe you can do something revolutionary by convince the good finance people of the world that they should increase share leverage borrowing to 95% LVR and and lower the interest rate to 2% with no marginal calls, because in your view shares are safer option.

Anyways property investment worked out well for me and my many others I know and shares might have worked out great for you so no point arguing.

 

Just to be clear. I view property and shares equal in risk long term.

I also think that im more worried about property at the moment than shares. Because you can make 50,000 dollar share bets. Property bets are a lot bigger. I also think we might be late in the property cycle.

 

I agree. We are retired on our long time share investments, inside and out side SMSF. We do have property just in case we were wrong. While our property investments have done very well our share investments have done much better. Once purchased shares cost very little to hold and the dividends keep coming in. No maintenance, no tenants, no property managers, no bills. Just dividends

 

Sydney and Melbourne certainly, but lots of opportunities elsewhere.

 

Maybe. There is always opportunity. Just picking the good ones. I worry in Australia we are in neeele in a haystack territory.

 

Try to get yourself to a Thornhill talk - his share purchasing is for the long term and he helps people get over the fear of a market crash by making it clear that it’s a buying opportunity - dividends don’t go down as much as the share price hence yields improve.

In any case, there are huge long Thornhill threads on here - possibly too long but a few posters who could help with the investing in shares mindset include @Nodrog, @SatayKing @Pumpkin etc..... if the threads are too much to digest, check out some of @nodrog’s individual posts as a starting point.

 

my mentality is this, well we are already down 20%, whats another 20%. either way i lose money, so we HODL.. honestly this is how i deal with it. (only apply for share that i buy to hold,) those speculative stuff i sell asap. they are for fun anyways

first thing i notice is you mention active.
here is your no.1 problem,
on average share traders (the very best) makes 10% a year.
if you can acheive or beat that number your wasting your time as a "trader"

there rest, i can only speak for myself, i am an invester. i dont sell my shares. unless i have a strong valid reason..
top of my head i can think of 10-20 shares in asx or nyse/nasdaq that grown over 20% in the last 3-4 years.
some big some small.
amazon + 85% this year,
apple + 95% from last year
like you dont need a brain or analyst to buy share in amazon or apple.
in the states the big caps are also the big growers, apple,google,micrsoft,berkinshire all done well.. in the last 4 years,
FACEBOOK ipo $25, now $166, high of $200+ ?
cant get more well known.

dont wanna pick these shares, buy an ETF. VTS/nsq/ioof, all up 8-10% a year on average.


then australian shares.
Macquarie bank 20%+ this year alone
coh and csl 50 & 80% last 2 years.
atlassian 40%?

small cap
a2m, 600% from 2016. u read that correctly..
after pay 400+ % from ipo ?

i guess you know the shares i hold now
(speculative shares are for fun think of it as a pun like on horses or football).


i invest in both, dont get me wrong i like both. especially commercial properties,
but scalling, there is no way property can scale like shares.

 

What are Your thoughts on afterpay? ATP.
They cracked the $21 now back to $17?

Do you think they Will do well in the USA and UK?

 

I basically hate all Aussie tech stocks. Atlassian is a unicorn.