Property or shares?

HAMISH_MCTAVISH

Graham_Devon wrote: »

So why do YOU hold shares rather than houses?

I hold both. And a bit in cash too.

My current allocation is around 75% property though, and even the most ardent of property bulls will admit that a little diversification is usually a good thing.

HAMISH_MCTAVISH

Graham_Devon wrote: »

your link to back you off starts with these words...

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Now then graham, your selective quoting strikes again I see.....

Here's that section in full.

10 reasons why houses are a better investment than shares

This article does not argue buying a house right now is a better decision than buying shares, or vice versa.

It explores why people have tended to do very well buying their own property versus their poor attempts at stock market investing, and what we might learn from that.

Thrugelmir

thescouselander wrote: »

There is certainly a housing shortage but I still haven't seen any evidence of this supposed mortgage rationing.

Been asleep the past 6 years?

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

I've had an interesting PM conversation with someone who has asked a few questions.

erhhhm!

I didn't expect you to reveal that I had PM'd you. In any case, my questions were "Why don't you stop boasting about Aberdeen house prices?" and "What do Scotsmen wear under their kilts?". I didn't expect graphs in the answer.

HAMISH_MCTAVISH wrote: »

For a well thought out opposite opinion, that disagrees with me on UK property, but seems to have a good track record with equities, try here....

www.retirementinvestingtoday.com

I feel rather flattered. I opened your link above, and read a link within that entitled "Simple Living in Suffolk" only to find that I have been quoted....

Poster Loughton Monkey made the good point that you can overcook focusing on how much you need to retire. His alternative, which is closer to the ERE approach is to drive your running costs to below your income, which is broadly how I do it. I then save the excess. There is more drama in my approach, particularly now where I am saving > 70%, but LM has been more consisent throughout his working life. Slow and steady wins the race, fortunately I also have the benefit of a company pension scheme to keep me in the slow and steady for all the years where I didn’t save explicitly.

Got nothing to do with house prices, though. Or Share prices for that matter. But quite a coincidence.

HAMISH_MCTAVISH

Loughton_Monkey wrote: »

"What do Scotsmen wear under their kilts?".

HAMISH_MCTAVISH

Loughton_Monkey wrote: »

I opened your link above, and read a link within that entitled "Simple Living in Suffolk" only to find that I have been quoted.....

Indeed.... The interwebs appear to be a remarkably small place at times.

I like reading SLIS, and RIT, and Monevator.

All good sites.

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

It's a question that comes up quite often, but we haven't had one of these threads for a while, so may as well do it again now.....

Trouble is, Hamish, it's not a valid question. The word "or" makes it rather invalid. Like asking if I drink gin & tonic or beer or wine. The thing is I drink all three. Different times.

So it's the same with 'property or shares'. Investing in one's own property to live in is a "given" [unless you are a 'yoof' currently priced out of the property market by had-it-all boomers....]. Investing in shares - albeit often under the wrapper of a pension scheme is also a given for most people.

Using one's cash ISA allowance too is a given partly because of the tax relief, but mainly because of the avoidance of volatile investment risk [in favour of the inflation risk.]

To some people (possibly in Devon) your question may be resolved by buying a "share in a property" which might be seen as a neat solution! The question then goes away on the grounds that you have both!

But I wonder if your question is too deep for some of the people who would not understand the debate. Your continual bullish comments on property are all very well and sensible, but I suspect they are mis-read by those less endowed in the brain department. Over on the Pensions board, just yesterday, I was reading a classic thread from no less than a 40-something school teacher with the 'bright idea' of investing his £350 a month Teacher's [FS] pension contribution into paying off his mortgage debt [at probably no more than 2%]. His logic seemed to be that his pension was not payable until age 68, and once he had paid off his own mortgage, he could divert the £350 into a BTL upon the income of which he could retire early!

Even after the floods of 'advice' I'm not sure he got it.

He seemed not to understand that (a) it was costing him only £280 a month after tax relief (b) the state employer is putting in at least twice his £350 which would be lost if he left the scheme, and (c) he would lose all his inflation protection, death in service, and guarantees.

If I had children under his sort of intellectual tutorship, I would seriously worry!

macaque_2

HAMISH_MCTAVISH wrote: »

It is difficult to overstate just how critical a shortage of housing the UK now has, and that strong a fundamental imbalance can usually only have one possible long term outcome on prices.

They'll soar.

Nice try but no cigar.


Demand equates to the number of people with both the means and the desire to buy. There are two problems with your theory.

1. As things stand very few people have incomes to support mortgages at current house prices and the market is being propped up by overseas buyers and Buy to Let. When interest rates rise, a swathe of BTLs will go bust because renters have already been squeezed to the limit.
2. Housing is moving to the centre of the political debate and the normal way governments solve such problems is through the tax system. Even a small change in tax could decimate the housing market (see commercial property). As the %age of the population excluded from home ownership rises, the political pressure to make tax changes will become unstoppable.

Generali

It's a very strange examination of shares vs. property that doesn't look at shares at all!

CLAPTON

macaque wrote: »

Nice try but no cigar.


Demand equates to the number of people with both the means and the desire to buy. There are two problems with your theory.

1. As things stand very few people have incomes to support mortgages at current house prices and the market is being propped up by overseas buyers and Buy to Let. When interest rates rise, a swathe of BTLs will go bust because renters have already been squeezed to the limit.
2. Housing is moving to the centre of the political debate and the normal way governments solve such problems is through the tax system. Even a small change in tax could decimate the housing market (see commercial property). As the %age of the population excluded from home ownership rises, the political pressure to make tax changes will become unstoppable.

if this were correct then would expect

- most houses were being sold to either foreigners and/or BTLers

this is clearly not so.