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FX Evolution co-founder Tyrone Abela’s contributes a fortnightly column in the Surf Coast Times called ‘The Beachside Trader’ and this week’s topic is ‘Share Market or Property Market Investment?’
Our experience with investing generally stems from the influence of our parents and grandparents, and we form a natural curiosity or bias towards shares or property. Some prefer the security of bricks and mortar and the ability to ‘touch and feel’ their investment, while others are comfortable riding the share market wave and love investing in businesses.
The truth is there is no right or wrong answer when it comes to choosing which type of investment suits you best, but there are some things that you should know which might help you make better investment decisions in the long run. As an example, the transaction costs associated with purchasing a property are substantially higher than investing in a share portfolio of similar value, so it is important to understand your entry costs and the potential impact this may have on your returns.
Investing in property and shares can potentially deliver you capital growth and an income stream but they are derived in different ways, each with their own set of positive and negative implications. One of the key differences between shares versus property is how the investment is valued. Share investing is completely transparent as the share price is traded on the open market via the Australian Stock Exchange (ASX). Property prices may fluctuate daily but we only truly know the absolute value of a particular property on the date it is bought and sold.
Understanding your short and long- term investment needs and setting realistic expectations is key to choosing the best investment suited to you. In the next two editions, I will reveal some of the benefits and the pitfalls of both investment types beginning with property investment, with the aim of equipping you with some information that may help you make better decisions on which one is right for you.
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