There won't be a crash

Thrugelmir

chucknorris wrote: »

You have to put it somewhere, and (net of tax) savings accounts pay less than inflation!

Perhaps a small loss is better than a large loss.

chucknorris

Thrugelmir wrote: »

Perhaps a small loss is better than a large loss.

I guess we look at things differently, my view is that it isn't just a potential small loss though, it is a guaranteed small loss, whereas investing in the long run will produce a higher yield and is likely to produce a capital gain, even if the market falls, that doesn't mean that you have to cash in and lock in a paper loss at that particular point in time.

lisyloo

I guess we look at things differently

Well surely this depends on a number of factors.
Attitude to risk, possibly age, whether you can deal with a loss and need for access.
Our parents are 89, so there is no long term.
Also people who have small amount may not be able to deal with a loss. There a big difference between having a few million and having a few thousand.


I also think that diversity is important, so some property, a diversified portolio of funds and some cash as well makes a lot of sense. My cash might not be making a lot but I need some for when I want to buy a holiday or any other big ticket items that exceed my monthly budget.

that doesn't mean that you have to cash in and lock in a paper loss at that particular point in time

Assuming you don't need to.
People of more limited means than you (chuck) do have to do this. A classic examples being divorce where the split means assets have to be sold (not all divorces of course).
Sometimes with inheritances people want their share in cash and won't be willing to hold onto other assets e.g. possibly a group of siblings, some of whom want their share of the cash.

I'm sure you both would agree that one size doesn't fit all here. I am always aiming for the best balance I can achieve which doesn't always mean the highest return.

chucknorris

lisyloo wrote: »

I also think that diversity is important, so some property, a diversified portolio of funds and some cash as well makes a lot of sense.

But the person that I was (originally) responding to, and making that point to, is arguing against buying a home in favour of renting, even when you have the means to do so, and he comes across as being far from elderly.

I won't be holding much cash until I am well into my 70's, although I will be investing in bonds before that.

lisyloo

But the person that I was (originally) responding to, and making that point to, is arguing against buying a home in favour of renting, even when you have the means to do so

I don't understand why some of you spend hours trying to persuade people of a no brainer if they are absolutely determined to believe otherwise (assuming long term use).

chucknorris

lisyloo wrote: »

I don't understand why some of you spend hours trying to persuade people of a no brainer if they are absolutely determined to believe otherwise (assuming long term use).

It was 30 seconds of my life that I'll never get back.

michaels

So today we had an agent's letter through the door - nothing unusual in that, we have got about 1 a week for the last 3 years desperate to list on our street - except today's said 'We have these 4 properties for sale locally, do you know anyone who might want to buy in your area?'

The market has turned methinks.

GreatApe

London is more highly dependent on migrants than the other regions if Brexit spooks them which it surely will/has then London rents and prices will be the first to be hit.

It has already happened with peak rents down about 10% and prices down about 5-10% too. Personally I am surprised that things have held up so well the +3% additional stamp duty hits London hard a £500,000 property costs £30,000 in stamp duty. Yet a year on things have not crashed just corrected a small amount from the very peak months of 2016

economic

GreatApe wrote: »

London is more highly dependent on migrants than the other regions if Brexit spooks them which it surely will/has then London rents and prices will be the first to be hit.

It has already happened with peak rents down about 10% and prices down about 5-10% too. Personally I am surprised that things have held up so well the +3% additional stamp duty hits London hard a £500,000 property costs £30,000 in stamp duty. Yet a year on things have not crashed just corrected a small amount from the very peak months of 2016

i suspect the next couple of years will be similar to wat the market was in 2008-2011. uncertainty around brexit and perhaps reduced net immigration should have an impact. i doubt prices will crash unless an unforseen event happens which will most likely be external one.

michaels

economic wrote: »

i suspect the next couple of years will be similar to wat the market was in 2008-2011. uncertainty around brexit and perhaps reduced net immigration should have an impact. i doubt prices will crash unless an unforseen event happens which will most likely be external one.

Given the strong correlation between the housing market and the economy you might expect the govt to step in...except that they are buying themselves a new 5 year election window so if they can fine tune the economy and house prices, now would be the time to get the bad news (hose price correction, low/negative growth, falling employment) out the way so that there is scope to engineer a boom in 3-5 years time....