Property V Shares

In this brave new post-GFC world, where does one invest? Property? Shares? Private Equity? Bury cash in tins in the backyard?

Being a property expert I can easily argue for property. If I was a share broker I would have as strong an argument for shares. Sometimes it seems easier to take a Trifecta at Randwick on a Saturday.

So what to do…..?

betting man.png

Investment in any medium, be it Property or Shares, requires careful consideration. I’m of the opinion that whilst you don’t need to be an expert in that field, you should know enough to know what you don’t know. Simply put, don’t be ignorant. The latest investment craze in Bitcoin and digital currencies is similar to the tech boom of the 90’s and is reflective of emotion not intelligent investing. When it comes to investment the majority of the world are sheep, following what is shiny and bright at that moment in time.

Now this doesn’t mean people don’t make money when Bitcoin is the flavour of the month, when residential apartments are in demand, or when shares are rebounding. However if you don’t have a basic understanding of what you are investing in, then it’s my opinion it is simply gambling, and you may as well take that Trifecta at Randwick.

I’m no Warren Buffett, but as a small independent business person, I have survived the ravages of the GFC and I put much of that down to two simple rules –

1.     What don’t I know about this investment class and do I have people who know what I don’t know who I can turn to for advice?

2·    Whatever you invest in, ask yourself before signing off, if the world turns pear shaped can I, and am I prepared to, hold this asset for the next 10 years?

3·    Keep your debt position to that of the individual asset. This doesn’t mean that Margin Lending or Mezzanine Debt funding is bad, but your overall asset portfolio should be able to withstand at least a 30% downturn in value without having to reach for 3rd party assets to survive.

Now this all quite easy and if you follow my simple rules you can’t go wrong…..right?

Good….now I’m off to Randwick. No.4 race 8 is a certainty…..my broker told me.

John Rosel