Sign of the Times

Discussion in 'Share Investing Strategies, Theories & Education' started by MTR, 23rd Feb, 2017.

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  1. MTR

    MTR Well-Known Member

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    I don't believe I have ever seen so many threads/posts on Shares/Share Market .... and this is a property forum.

    This is great of course, but tells me perhaps property investors are struggling to achieve returns, considering recent booms in Syd and Melb I expect yields could now be as low as 3%.??

    With interest rates on the rise it is critical to watch your cash flow.

    Cash flow is King or Queen

    MTR:)
     
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  2. Perthguy

    Perthguy Well-Known Member

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    I think it's that we got a wake up call that living off rent is easier than it sounds. When I started investing in property, I did not know that costs could be as high as 30% to 40% of rent! My parents experience in Adelaide really brought this home to me so I am one of the investors looking at the stock market for reliable income with 30% expenses! The big difference for me is the rise of the ETF. Personally, I see an ETF like VAS as a lot less risky than direct shares.

    Of course with the ASX trading at near record highs it's probably a lousy time to buy in. :)
     
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  3. Barny

    Barny Well-Known Member

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    Spot on, people are moving towards shares. Especially cause some friendly peeps such as @austing and others are helping property investors understand some of the dark side.
     
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  4. MTR

    MTR Well-Known Member

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    Kudos to @austing

    Unless investors diversify other asset classes or tweak property strategies that improve yields they will certainly struggle moving forward

    MTR
     
  5. Phase2

    Phase2 Well-Known Member

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    Funny, I was thinking there's been a surprising rise in stock-market related threads here too.. then again, I joined PC last year to learn more about property investing (development in particular) and now, I find myself seriously considering steering away from property and more towards stocks/LICs/ETFs. :eek:

    I feel like a traitor somehow:oops::p
     
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  6. MTR

    MTR Well-Known Member

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    I think its great and perhaps because we have a couple of savvy share investors on this forum... very nice indeed
     
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  7. Barny

    Barny Well-Known Member

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    You're not a traitor, you have been educated that property is not always what you thought it was. But wait till a huge market crash occurs, then most will run back back to property.
     
  8. MTR

    MTR Well-Known Member

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    Also finance is tightening and property investors are hitting the wall, share market may offer other opportunities.
     
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  9. Perthguy

    Perthguy Well-Known Member

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    Not me. I am waiting for that to buy in big! :)
     
  10. dabbler

    dabbler Well-Known Member

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    Good, hope it catches on for 5-10 years and drops off the radar for a while, in all honesty, I think it will, the returns for what a lot have an appetite for is absolutely horrendous & only going to get worse with some rate rises.....

    Quick, pass that parcel, cause the music is gonna stop some time soon :)
     
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  11. MTR

    MTR Well-Known Member

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    Why do you think I am now back in USA, cash flow and capital growth.

    I am not suggesting this is for everyone, I understand that most on this forum wont feel comfortable with playing in this market but Aussie market has just got a little tougher.

    MTR:)
     
    Last edited: 23rd Feb, 2017
  12. Phase2

    Phase2 Well-Known Member

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    Yeah, when I was introduced to "real" property investing (as opposed to buy a house where you grew up and hope it goes up in value), it was the Living off Equity stuff of Michael Yardney, et al ..
    If only I'd listened to him and bought that place in Sydney instead of building a PPOR here. Whatever. :)

    APRA rules have changed the game a bit, and so has the national economic landscape. Incomes aren't rising and there has to be a natural limit on how much people can actually afford to borrow and pay back. I think this will pull back on capital growth for a while.. Property net yields are dismal (in general) at the moment too.

    That leaves me with 2 options as I see it.
    1. Invest in compounding industrial stocks/ETFs/LICs for decent yield and help recycle some debt, or
    2. Keep searching for development deals that stack up. In Perth, this may take some time.

    I was waiting for the market to crash in '07, but it didn't happen until '08. I bought in after the market had dropped 30%, thinking I was pretty clever.. until I watched the market go further and further down... burnt fingers kept me away, but if I'd read Thornhill's stuff back then, I'd have probably kept going harder!! Live and learn.
     
    Last edited: 23rd Feb, 2017
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  13. Barny

    Barny Well-Known Member

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    I still think property in Syd and melb will do well while rates are low and immigration and jobs are still present. Your right regarding apra and it's much harder than ever for investors. But we investors on property chat are a tiny group and I don't think we represent the real world. Many people out there that can still buy and keep prices high, these people are buying one house, not a portfolio.

    Rental returns are terrible, I see the shift continuing towards shares for investors.
     
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  14. MTR

    MTR Well-Known Member

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    As far as developing goes, hot markets Syd and Melb, in particular Melb my playing ground, land has risen too fast and now it will be harder for developments to stack up. If developers are counting on end values continuing to rise and pay too much for the land I would consider this a high risk strategy. There may be opportunities to buy DA/plans and permits in place and this may be a better option due to timeframe, however still need to make sense.

    Perth, well I am not playing, have been out of this market since 2014, I am not at all comfortable jumping in at the moment. Development sites stopped making sense in late 2014 when market started turning.

    I am sure there are those out there that have the skills to make it work, I am not one of those, I will stick to what I know best.

    MTR:)
     
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  15. MTR

    MTR Well-Known Member

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    Anyone paying attention to US stock market? its roaring ahead. I may consider looking at this as economy is on the rise, but will need to do more research on this before I jump in
     
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  16. Phase2

    Phase2 Well-Known Member

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    That's kinda my point. With Sydney median's hitting close to $1.2M, actual affordability has to kick in soon. I don't think it will send things downhill, but certainly put growth on pause for a while.
     
  17. Phase2

    Phase2 Well-Known Member

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    Yep, going gangbusters.. GLF.AX is 70% invested into Berkshire if you want good exposure to the US.
     
  18. KDP

    KDP Well-Known Member

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    Yeah I have about 40% of my stock portfolio in the us and if you think the asx is expensive the s&p is breaking records. This is what I meant about not trying to time the market, people have been saying the s&p is too expensive for a while now and it keeps chugging along and the trump trade doesn't seem to be slowing at the moment either. Most of my holdings are in an s&p etf or Berkshire. However, I do hold a bit of direct stock where I like the particula theme, ie. amazon currently.
     
  19. Barny

    Barny Well-Known Member

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    Well that's what I thought over 2 years ago but it hasn't stopped. Who ever is buying there has deep pockets. Wonder if Syd median can hit 1.5m within 3 years?
     
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  20. Chabs

    Chabs Well-Known Member

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    Have been following it closely, I have "paper money" of 10 000 I had invested some time ago and experimented with, currently at paper money returns of 18% after a little under a year approx! Not sure if I want to try and replicate this with real money.

    My best performers at the moment:

    Apple +44%
    Cisco +29%
    Facebook +29.5%

    Based on the growth from when I bought them to now (e.g. buying apple when I noticed it at $93 per share).

    Biggest thing I learned is simple: Forget vanguards, "low risk shares" and all that junk, that stuff barely profitted me.. Go for something that you see as unusually cheap because of market sentiment over what happened in the last few weeks/months/years. Much more growth potential.

    edit: Here is a pic
     

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    Last edited: 23rd Feb, 2017
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