ETF Shares vs property - old debate new calculator

Hi folks,

I wanna have your feedback on the calculator we built below for comparing the historical return on shares vs property.
https://share.streamlit.io/sheldenburg/shares_vs_property/main/shares_vs_property.py

If you are ever interested in reading the whole article, here is the link.
Shares vs Property



Thanks!

 

The share returns don't pass the sniff test.

Does your share calculator include dividends?

Measure of historical returns are useless without taking into account total return, especially when you are including rental return in your property calculations?

Your property comparison is laughable. The returns are made up by just putting in hypothetical numbers for a return. You also need to check your grammatical errors in the blog.

 

Time periods also matter a lot. I'm betting this might start at the peak of the dotcom bubble putting shares in a bad light.

20 years is short in investing terms.

 

Gearing?

 

not a comparison with the ASX 200 ( XJO ) as well ??

valuing property returns can be tricky , some have some creative ways of minimizing tax

obligations , while improving property value/returns

it is very hard to please everyone in just one graph

but hopefully you have educated some

cheers

 

Yea, tricky thing is getting the data before 2000 to cover capital cities. You can adjust the time period in the calculator.

 

Thanks for the feedback. Yes agree, this calculator has not taken into account negative gearing... As it depends on individual's income. This is just a generic model to estimate the pre tax return.

 

It's the daily adjusted close we are using. I believe this has already been adjusted by dividends? Anyone feel free to correct if I'm wrong.

 

Really not seeing how this helps with decision making, to be honest.

 

decisions aren't always easy

say i was looking to buy a particular ETF i will spend a week ( or more ) researching it than comparing it to rivals

a graph as displayed here MIGHT point you to a primary sector

shares/ETFs have advantages while property has different advantages ,

now if you had multiple asset classes a graph might suggest it is the time to focus in one direction or another

remember there are lies , DAMN liies and statistics , crunch the numbers the way that best suits you , say quick and dirty if looking at 10 to 20 years , or slow , and methodical if planning for 25 years plus

cheers

 

Most importantly, there are good and bad shares, same as good and bad properties.

 

Can you go back to 1900?

The Historical Average Annual Returns of Australian Stock Market Since 1900 | TopForeignStocks.com

 

Shares Vs property imho is a debate which is a total waste of time. It doesn't take into account the most important part of the equation.

The investor.

The investor can utilise gearing (perhaps a lot safer too than in the stock market), add value, manage psychology better than in other asset classes,

People like to compare asset classes all the the time but forget to include the most important variable in their analysis.

 

Very silly comparing Aussie property performance with US stocks, it depends on point in time You could have 50% more gain or 50 less gain with shares depending on what currency you are using . Given Aussie $ was .50 $US in 2002 and is now .78 .

 

Also to me it is not just about % growth between asset classes, and who is invested in ALL ASX and ALL RE in Australia at any point in time?
As I wrote this before, someone worded it much better than I could:
This was one of those "aha" moments so many years ago.
The key to the question for me is Leverage not % growth. I don't doubt for a minute that a share can have a much greater % growth than IP. However, property allows me to be exposed with little risk and no margin calls to the tune of millions.
Could I sleep at night with that exposure to the ASX or other more volatile markets? The answer is resounding "No!".
Subsequently, a share portfolio is something I dabble in (to the tune of tens of thousands and it varies all the time) until I can buy another IP.
When I understood that leverage is the key and not gambling for % growth, shares become an income exercise while IPs become my wealth creation exercise.

 

i would suggest both shares and property , but few people would be able to start in both at the same time , so the investor would have to decide which step to take first

with shares you can start relatively quickly but timing is very important , to buy property one normally needs the capacity ( credit-worthiness ) to borrow a fair chunk of the price , whereas $1000 can have you taking baby-steps in the share-market , learning and modifying as you go , maybe even make a decent deposit on that first property with some solid judgment

investing sensibly is all about making the best choices for YOU , if property is your biggest need try for that first , if not wait for the opportunity

 

Property where? In Sydney or Cairns? Even within one city there’s a huge discrepancy.

I have a CBD shop that that’s gone up 400% since 2013. Also had a house that I sold which only went up 50% between 09 and 15.

 

i agree property has it's own unique quirks

 

food for thought since most are unlikely to buy in the US

Want To Invest In Farmland? Here’s How

Want To Invest In Farmland? Here's How | Peak Prosperity

 

What’s the point of the averag index tho in property. You’re not buying the property index

I’ve had real estate that have done 400% in 8 years now, at 70% gearing and 6% net yield. So ROE is probably something like 1000%

I’ve also had stocks that have done 1000% in two years giving me a dividend yield of around 150%. Index is so pointless. And I suspect if you graphed the S&P 200 over same period it’ll be less than Nasdaq or propetries