This is always an interesting question and one that many will have a view on. Some people argue that investing in the property market is more stable and “less risky”. The opinion of those on the flipside is that without risk there’s less return on your investment. Let’s look at both options.
Investing in the property market is attractive for some people because it’s tangible. You can see it, touch it, drive past it to make sure it’s still there. Buying a property also then allows you to increase your income through rental payments and you can borrow against the property for further investments.
The downside is that property requires a large amount of capital and it’s hard to get money out of if you need it quickly.
The share market is different in that, at times, it can offer more lucrative returns. Yet it can be unsettling because it’s the unknown and can leave you feeling vulnerable. When is the right time to buy, sell or hold shares? Is the market changing and why? Am I making the right decision?
Every type of asset has its advantages and disadvantages, the key is to understand why and how you’re making your investment decisions. Do you lean towards property because of the tangibility or maybe because people in your social circle are investing that way? Do you buy shares on a whim because of a personal recommendation from a friend? The question is, will these decisions get you to where you want to be?
Take the steps to understand the end objective of your investment strategy. Be clear on what funds you require in both the short and long term to determine the right investment for you, and always feel free to be in touch if you’re unsure and need advice.
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