Equities, why am I so irrational?

vectistim

I do feel tangibility has a part to play in this.

My stock market investments are essentially just numbers on the computer screen, and feel rather ephemeral.
My property investments come with a set of keys and feel far more real (real property!).

kidmugsy

If you need to, it'll be dead easy to sell 20% of your shares. You can't sell 20% of a house easily. So, yes, you are being irrational.

Ryan_Futuristics

Well I personally think we put far too much faith in stocks & shares ...

- The idea they'll keep rising, and pick themselves up from crashes is far from certain ... Many markets have fared much worse than ours since the '99 crash - and every major market has had 20-30 year downturns (where you wouldn't have made much money holding on)

Plus, academics question whether capitalism is capable of sustaining endless growth - while we've had 100 years of post-industrial expansion and new regions joining the free market, we're now faced with 100 years of rapidly ageing populations, unemployment and hard environmental limits


The level of QE we've just seen from the US (and may see from Japan and Europe next) is really unprecedented - markets have been ignoring fundamentals and responding to stimulus (it's like a wife in a failing relationship measuring your love for her by how much Viagra you have to use)

At least with property (while we probably are in bubble territory) there is still a supply shortage, and rental yield is a bit more of a certainty

Voyager2002

Ryan_Futuristics wrote: »

W
At least with property (while we probably are in bubble territory) there is still a supply shortage, and rental yield is a bit more of a certainty

No. The rental income depends upon people having jobs near to your property and earning reasonable wages from their work... something that would also mean that shares in the companies that employ them would be doing reasonably well.

Visit somewhere like the west end of Morecambe, or the centre of the city of Newark in the US State of New Jersey. These are both areas that at one time were prosperous, but where employment collapsed leading to a glut of very cheap property.

gadgetmind

Ryan_Futuristics wrote: »

Well I personally think we put far too much faith in stocks & shares ...

As long as companies continue to provide goods and services that people need, we should keep ticking along.

Plus, academics question whether capitalism is capable of sustaining endless growth

We have some large problems to solve, but just a few key technologies need to drop into place, and we're much if the way there.

Kendall80

gadgetmind wrote: »

We have some large problems to solve, but just a few key technologies need to drop into place, and we're much if the way there.

Fusion would be nice - although I'd need a heads-up so I can sell my oil investments

chucknorris

kidmugsy wrote: »

If you need to, it'll be dead easy to sell 20% of your shares. You can't sell 20% of a house easily. So, yes, you are being irrational.

But we can sell 2 houses (to the value of 20% of our total property value), but that wasn't actually the point.

gadgetmind

Kendall80 wrote: »

Fusion would be nice - although I'd need a heads-up so I can sell my oil investments

I think that one (perhaps even two) technologies will (indirectly or directly) beat fusion to the finishing line, but they will all have slightly different niches. I can't expand as I'm currently writing a book on the subject!

Thrugelmir

gadgetmind wrote: »

Both have a place,

My observation is based on my own personal experiences over many years. Hence my comments. When you've been there and done it personally. Perspectives differ.

As far as property is concerned I have sufficient exposure through my own home. Along with share holdings that cover everything from construction of property, to the letting of residential property, office blocks, supermarkets, retail parks etc.

As far as BTL is concerned I prefer to own a share of the finance companies that lend the money.

Masomnia

I think with shares being much more liquid and (mostly) quoted on an exchange you can check the price any time, follow daily movements. Which is fun if you're into that sort of thing ( ), but can also cause you to worry if there are significant gyrations. Property on the other hand you've no idea how the value is fluctuating, as you don't really know what it is worth until you try to sell it. So there's a kind of blissful ignorance.

Also, I think the property market doesn't function as a market properly, where the stock market does to a much higher degree. The government will never let property crash: near-zero interest rates, planning policy, QE, inertia with regard to house building, favourable taxation, £20 billion per annum housing benefit, all conspire to keep prices up. I think you know deep down you're never going to get the sort of crashes you'll see with shares from time to time as it just won't happen for political reasons.