Shares always go up

Cleaver

kabayiri wrote: »

Shares are definitely more liquid. You can turn them into cash in just a few hours.

Now if you're desperate to sell property? That is a rather different proposition.

'Tis true. I guess if we were doing this properly though, we could build quite a large pros and cons list for both shares and property (along with any other investment you care to mention).

At the end of the day I guess that, like all investments, it comes down to personal opinions and hunches as to what you think will perform best over the short or long term.

The illquid nature of property would certainly be high on my 'con' list though, as would the large amount of capital required to invest in it, presuming you're buying the bricks yourself rather than via a fund.

JoeCrystal

Hmm... I glanced at the return of my shares and... no, they does not always go up!



Beside, the trouble with properties is the length of time it takes to sell, can take long time to save up for deposits and what more, it take even more just to buy a home outright. The value of home is always uncertain and subject to whim to whom it values.

At least with shares, I know day by day how much these shares worth and more vitally, if I need money for important reason, I can sell my share certificates.

Cleaver

JoeCrystal wrote: »

The performance of my shares since Jan. It looks a bit similar to your's:

JoeCrystal

Interesting! I wonder just how many people's share portfolio look similar!

Graham_Devon

Cleaver wrote: »

Sorry, but I'm a bit stumped. I'm sure there's a reason though, there always is.

Assume it's all to do with maintanance and stuff like that. I.e. if you bought a house that long ago and did nothing with it, it wouldn't be worth anywhere near that price.

Sorry, that was a bit serious for this time of the night.

So heres a picture of another monkey.



Quite apt for this place too

sabretoothtigger

PasturesNew wrote: »

I am always confused when shares are compared to houses, because you borrow money to buy a house .... and it takes a lifetime to pay it back (nearly). So the two things aren't the same are they.

In the majority most shares are bought with borrowed money I think. Even warren buffet takes money from insurance premiums and invests it in companies, its borrowed because sooner or later he has to pay out on the insurance. His gamble is the average gain

Lehmans were on like 60 to 1 leverage so they buy 600,000 dollars worth of stock with only 10,000 real dollars.

Borrowing and the cost of that borrowing matters a gigantic amount to the value of stocks as far as I can tell, I know there is sensible stuff like pension funds but the amount of funny money is big so far as I can tell

It can work out that borrowing to buy a share works, often not though and it makes it very risky.
Luckily the fed is printing 600bn in QE. Gets fuzzy here but that involves 5 year government debt and knocks onto lowering the cost of everything else i think including mortgage debt and also stocks so it is connected in this case


To the OP are shares better then houses ? They are more risky, I'd tell people to do the obvious first and reduce costs by not paying rent to a private landlord and take charge of your own house basically.
Tax favours the house generally.
Of course if you pick stocks well, go for it just dont get carried away like kirstie allsop and those houses

I think the OP assumes a diversified portfolio of non-rubbish shares.

Northern rock appeared to be a great stock at one point and my bradford bingley shares went up tons, I really wasnt sure why though so was pretty fearful of any downside and sold them
Heres my learned philosophy towards anything really, stay light http://www.youtube.com/watch?v=WKDpEel5dcs

Loughton_Monkey

Cleaver wrote: »

Sorry if my calculations are wrong (I'm not great at this type of thing) so please feel free to tell me if I'm way off course. But the graph looks misleading to me.

Exactly right!

As anyone with even an O-Level in maths would know, there are many ways of fudging a graph to show a result falsely. This one breaks just about normal rule of presentation.

The vertical scale clearly starts at zero, and of course 2,000,000% of F*** All is F*** All.

This graph cannot form the basis of any rational discussion.

Cleaver

Graham_Devon wrote: »

Assume it's all to do with maintanance and stuff like that. I.e. if you bought a house that long ago and did nothing with it, it wouldn't be worth anywhere near that price.

I've thanked you because you provided a picture of a money, but if they have presented the graph with maintenance then it's a ridiculous comparison.

Loughton_Monkey

Dirk_Rambo wrote: »

with all due respect your very very worng. if you had attended the apropriate 70 percent club seminar youd understand it very clearly

With even more respect, I state again. This graph cannot form the basis of any rational discussion.

I have no idea what you may have learned at this seminar, and for all anyone knows that may have made sense. But you have posted a graph. You have not infomed us of any definition of what the graph represents. The X axis clearly represents a series of dates. The Y axis shows a quantity of £, but is undefined. The colour coding is clear enough. But there is no title. So what does the Y axis represent? Let me guess:

1. The growth rate per £X invested in FTSE, Property etc.? (Cannot be, since it starts at zero).

2. The average amount of £ invested in FTSE, Property etc. per person per year, or per lifetime?

3. The total of £ investments per household in FTSE, Property etc.?

As Cleaver has eloquently explained, investment in Property or investment in Equities would have much more similarity than such a graph could indicate to the uninitiated.

So I would still like to understand what we are supposed to learn from it.

Loughton_Monkey

Dirk_Rambo wrote: »

i beleive the graph formed part of an internal 70 per cent club reseacrh paper. as such it should never really have being released tp ordinary people as theyre rarely cleaver enough to understand any of it

What is the "Internal 70 percent club"? Reference to their IQ?