Written by Aaron Alston – Financial Adviser
Historically both property and shares have outperformed cash over a prolonged period of time. Whilst interest rates on home loans and cash are at record lows should you be taking advantage of the investing into either the property market or share market? Here are 2 pros and cons of both asset classes below.
Pros – Property
- The ability to leverage and control a large asset
- The ability to renovate and upgrade and add value to the property.
Cons – Property
- Holding costs – There are costs associated with repairs, maintenance, property management fees. Property maintenance costs can be unpredictable.
- Not being able to sell – Property can be on the market for months without any interest from a buyer.
- Diversification – You can invest in a number of areas including bonds, debt securities, Australian, global, and even commercial or industrial property.
- Liquidity – Shares can be liquidated and converted to cash in a few business days.
Cons – Shares
- Volatility – shares generally can decrease in value much quicker than property. COVID 19 is a prime example of how quickly the market can be impacted over the short term.
- You have no control over the day-to-day operations of a business (unless you are investing in your own company).
Which path do I choose? As there are many pros and cons to any investment, you need to consider the risks associated with both shares and property and decide based on your personal situation, objectives and needs. Hudson can help you decide which investment vehicle is the right one for you. A healthy investment portfolio should have a combination of the two.
The above information is general information only and does not consider your financial situation, circumstances and needs. Should you wish to speak to an adviser contact Hudson on 1800 804 296.