Real Estate or Shares

Discussion in 'Investment Strategy' started by ross100, 9th May, 2022.

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  1. ross100

    ross100 Well-Known Member

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    As you know the interest rates are going up(3-5%), what would you do still buy in real estate or buy shares
     
  2. MTR

    MTR Well-Known Member

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    How long is a piece of string?????

    Property buying will be dependent on market. Would not be buying in Syd/Melb

    Perth is a buy for property as market is rising and there are a couple of other markets

    Personally only buying shares on dips, too volatile atm.
     
    John_BridgeToBricks likes this.
  3. Sackie

    Sackie Well-Known Member

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    Look for the opportunities which suits your risk tolerance.

    All assets fluctuate in prices. I'm currently adding value to RE, looking to buy again soon and shorting US stocks. Those opportunities suit me.

    Find what works for you. Don't over commit.
     
  4. Ruby Tuesday

    Ruby Tuesday Well-Known Member

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    It would depend on borrowing capacity and the deals available, but if I cant buy property and use equity to buy at least some shares,I would just buy shares.
     
  5. MB18

    MB18 Well-Known Member

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    Im a shares guy but even I would respond with something along the lines of either 'it depends' or 'its not really a valid question'.

    I am still buying shares because (market wide) companies still make money when interest rates go up, some more so than when rates fall.
    Also, many companies have an ability to pass on higher costs anyway, and if inflation is rising due to a firing economy then companies are typically making more money in the first place.

    Obviously not every company is the same, and the high PE ones seem fairly vulnerable to rising interest rates.
    Other than that, Im sure that regardless of interest rates, Woolworths will still be selling groceries, BHP still be selling rocks, and Telstra will still sell mobile data.
     
  6. ross100

    ross100 Well-Known Member

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    jut wanted to add, shares meaning VAS/VGS/VDHG long term
     
  7. Mulianto

    Mulianto ~~

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    The beauty for property investment is that there is no margin calls :Das long as you can afford the interest payments, supported by government policies, and most importantly the power of leverage. But I’d only buy in Perth at the moment.
     
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  8. Baker

    Baker Well-Known Member

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    So glad someone finally asked this question.
     
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  9. Properwin

    Properwin Well-Known Member

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    I’ve got my eyes peeled and cash liquid right now waiting for the right property bargains to come along. My time span is >10 years so not fussed with current cycle.
     
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  10. Bowser

    Bowser Well-Known Member

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    Share market is a risky game at the moment and I personally believe we are in the process of the biggest retractions of our lifetimes. Inflation and supply issues are not priced in for what they need to be.
    Saying that pick the right stocks and you can make a motza right now. I put $150k into coal stocks in late Jan and cashed out 2 weeks ago with $380k in the pocket (yes I will pay CGT) but it's a good start to use as a deposit for next property purchase. Current spot price is $400 US tonne and Aussie companies are easily making in excess of $300 AUD tonne right now. They will only go north whilst the world turns their back on Russia and works out the alternative energy sources just aren't where they need to be to faze coal out this early.
     
  11. larrylarry

    larrylarry Well-Known Member

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    Don’t succumb to FOMO.
     
  12. Alk

    Alk Member

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    Depends on what property and what shares. My opinion: You need to not just look at the interest rates rises but why they are happening. Inflation is coming from both cost push (supply chains, wars, etc) and demand pull (COVID stimulus bounce).

    Property I feel is more an interest rate play especially at these low rates where small changes have a larger proportional effect. While the whole share market diversified has IR's as a large factor (especially in growth orientated markets like tech/NASDAQ) they aren't always and portfolios can be structured to be less IR dependent. Our little share market has an advantage in this environment compared to some overseas for once IMO. Currently the factors I feel in the market are:

    - Cost push inflation: Oil, commodities, rare earths, even agriculture etc should do quite well.
    - Money not as cheap: Some businesses benefit from this relative to others (e.g. established cash cows do better than growth companies, banks IR margins can now rise again, etc).

    There are stocks you can buy to take advantage of that. Usual disclaimer: This is an opinion, DYOR. It also depends how high IR's go. From 0.1 to 1% is still very low, if they go to 2.5%+ then previously unloved cash cows may become favorable again.
     
  13. TAJ

    TAJ Well-Known Member

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    Why does it have to be one or the other?
    Diversification can take place by allocating funds across asset classes; not just within one asset class.
     
  14. ross100

    ross100 Well-Known Member

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    If you got both shares (ETF) and property and looking to invest more would you go Shares now since IR are going up and property is at its peak.
     
  15. MTR

    MTR Well-Known Member

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    Are you sure property is at peak??? There are many markets in Oz

    Do you think shares are at peak, over valued?

    I just try to protect my capital. Covid has made many people wealthy/wealthier ??? But dont let it get your head. Patience is a virtue
     
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