Globl stocks vs london property - which is likely to be a better investment

economic

Just want to start a debate here. which would be a better investment over the next 10 year - a globally diversified stock portfolio (index tracker) or london property? based on a return on capital employed.

obviously property has advantage of leverage so can help with returns however what does everyone think will be a better investment?

michaels

What is your base currency?

Obviously transaction costs especially purchase taxes are very high for property.

chucknorris

economic wrote: »

Just want to start a debate here. which would be a better investment over the next 10 year - a globally diversified stock portfolio (index tracker) or london property? based on a return on capital employed.

obviously property has advantage of leverage so can help with returns however what does everyone think will be a better investment?

It is a 'no brainer' for me, I'd go for (in fact, I have been for quite a few years now) the index tracker. But if I was younger (I'm 58) it might be a more difficult decision.

economic

chucknorris wrote: »

It is a 'no brainer' for me, I'd go for (in fact, I have been for quite a few years now) the index tracker. But if I was younger (I'm 58) it might be a more difficult decision.

i am 33. already have my own home. would you still suggest buing a property or just sticking to stocks? my feeling is stocks globally will be a much better proposition as you are diversified away from sterling, liquid, low transaction costs, dont have any mgt issues you have with property, being much more diversified (property is not just property but an investment in ONE partiular area and building etc). sterling has fallen 15-20% since pre brexit. with all the uncertainty around brexit which could last years i think sterling wll continue to be under pressure.

positives for London property are that they seem to offer better yields then global trackers and this is enhanced by leverage. this is really the only advantage i can think of.

Thrugelmir

economic wrote: »

obviously property has advantage of leverage so can help with returns

Leverage is a double edged sword. Not a one way street.

What allowance have you made for taxation?

economic

Thrugelmir wrote: »

Leverage is a double edged sword. Not a one way street.

What allowance have you made for taxation?

yes agree

taxation - assuming ISAs fully maxed out, i agree taxes will be at a disadvantage for something like property as you cant sell small chunks of it to remain below allowances. so yet another benefit for stocks over property is the tax advantsge.

Thrugelmir

economic wrote: »

yes agree

taxation - assuming ISAs fully maxed out, i agree taxes will be at a disadvantage for something like property as you cant sell small chunks of it to remain below allowances. so yet another benefit for stocks over property is the tax advantsge.

Consider pension as well. With the increasing state retirement age. Is way of taking early retirement and bridging the gap. By using the amount of tax free cash available.

chucknorris

economic wrote: »

i am 33. already have my own home. would you still suggest buing a property or just sticking to stocks? my feeling is stocks globally will be a much better proposition as you are diversified away from sterling, liquid, low transaction costs, dont have any mgt issues you have with property, being much more diversified (property is not just property but an investment in ONE partiular area and building etc). sterling has fallen 15-20% since pre brexit. with all the uncertainty around brexit which could last years i think sterling wll continue to be under pressure.

positives for London property are that they seem to offer better yields then global trackers and this is enhanced by leverage. this is really the only advantage i can think of.

After all the tax changes are implemented, dividend income will give me a higher net return than my rental income. It is only marginal, but shares are also less hassle and its easy to avoid CGT too. I can't advise you, it is very subjective.