Shares or Property?

[Glen48]

With IR coming down I can see a new boom in RE and a bigger bubble all we need to know is when will the thing pop.
I am sure IR will come down more as the Feds do all possible to keep the economy afloat.

 

[shezian]

With IR coming down I can see a new boom in RE and a bigger bubble all we need to know is when will the thing pop.
I am sure IR will come down more as the Feds do all possible to keep the economy afloat.

We trade the currency market. And they have been performing badly in the last 3 years. Hence why we lost money.

 

[tech/a]

We trade the currency market. And they have been performing badly in the last 3 years. Hence why we lost money.

????

 

[Value Collector]

Well, it all depends on when you started and how much you started with. Its a long story what happened. But we have pretty much started from scratch as our risk profile was way too high, so since the start of this year we have lowered it, to bring it to a much more realistic levels of an average of 30% per annum. We were making 80% per annum, and found way too risky and lost a fair chunk of out capital, hence now we are starting with only $30,000, feels like its going to take years to get somewhere with this small amount of starting capital. So we have decided that each year it makes money we add that same amount and if it doesn't we don't add. It has to work for itself. We have lost money over the past few years, only because our risk was way too high, now we have halved the risk, so our chances of every losing our capital is near zero. But you can never say never in the trading world.

didn't you say you averaged 30% for decades, even if you only started with $10,000 you would have millions.

When you starting with such a small capital base your own contributions will be one of the fastest ways to help make it grow.

Eg. If you have $30,000 and you save $10,000 your capital has increased by 33%. So having a savings plan is very important at the early stages to give yourself a boost.

I don't think you are a sophisticated enough investor to have an elaborate investment operation, I would probably just suggest putting your funds into an index and concentrate on regularly adding contributions.

It worries me when you say "It feels like it will take years to get some where" because when people are in a rush, or feel like they have to play catch up, they do stupid things. Investing does take years, and the markets will fluctuate, the key is to have an operation that will make money over the longer term despite the ups and downs, an index fund should do this for you.

 

[Value Collector]

How can you be making 80% a year and lose capital?

I guess they were only counting the good years.

 

[Wysiwyg]

We trade the currency market. And they have been performing badly in the last 3 years. Hence why we lost money.

Currency markets don't perform badly in a trading context. They are simply prices at any given moment. Traders perform badly (or goodly).

 

[tech/a]

Currency markets don't perform badly in a trading context. They are simply prices at any given moment. Traders perform badly (or goodly).

Hence my ???

 

[Value Collector]

Currency markets don't perform badly in a trading context. They are simply prices at any given moment. Traders perform badly (or goodly).

Performing badly, Like a lion at the circus. eg not doing what its told

 

[tech/a]

Performing badly, Like a lion at the circus. eg not doing what its told

Clearly I married a Lion.

 

[shezian]

didn't you say you averaged 30% for decades, even if you only started with $10,000 you would have millions.

When you starting with such a small capital base your own contributions will be one of the fastest ways to help make it grow.

Eg. If you have $30,000 and you save $10,000 your capital has increased by 33%. So having a savings plan is very important at the early stages to give yourself a boost.

I don't think you are a sophisticated enough investor to have an elaborate investment operation, I would probably just suggest putting your funds into an index and concentrate on regularly adding contributions.

It worries me when you say "It feels like it will take years to get some where" because when people are in a rush, or feel like they have to play catch up, they do stupid things. Investing does take years, and the markets will fluctuate, the key is to have an operation that will make money over the longer term despite the ups and downs, an index fund should do this for you.

Index fund?? What is the annual return of investing in that?

 

[Hodgie]

Index fund?? What is the annual return of investing in that?

Like any other investment which has an element of risk, the return is not a certain or a set percentage.

It is just a simple and low cost way of gaining exposure to the markets average returns.

 

[Value Collector]

Index fund?? What is the annual return of investing in that?

Well it depends which index you invest in.

Here is a link to the asx 200 accumulation index. it done pretty well over time, Basically with the asx 200 accumulation index you are invested in the top200 companies, and all dividends are used to buy more shares, so the compounding affect can be massive over time.

http://www.netactuary.com.au/_ref/ref21.aspx?ID=arcsuper

 

[Value Collector]

here is a chart of the all ordinaries accumulation index.

 

[Julia]

That's a good example of how a chart can be a bit misleading. Because it goes from January to January every five years, it omits the peak during the latter part of 2007 where the All Ords went to 6800 before beginning the great fall of the GFC.

 

[qldfrog]

even so, still great as you can realise you can buy it now at the same price as 7 years ago;
And we are talking accumulative I believe

factor inflation and it is a great bargain to buy now: more than 20% less in real dollars than in 2007.

just a side kick to the perma bull and the figures used in your super website "calculator"!

 

[qldfrog]

That's a good example of how a chart can be a bit misleading. Because it goes from January to January every five years, it omits the peak during the latter part of 2007 where the All Ords went to 6800 before beginning the great fall of the GFC.

Hi Julia,
I believe this is included: the values on the left are not the all ord values, but a reference to the index set at 1000 in 1979.
I so believe this graph encompass the actual peak.
But as per my previous post different ways to look at it

 

[Wysiwyg]

even so, still great as you can realise you can buy it now at the same price as 7 years ago;
And we are talking accumulative I believe

factor inflation and it is a great bargain to buy now: more than 20% less in real dollars than in 2007.

just a side kick to the perma bull and the figures used in your super website "calculator"!

Cost to carry the Stock Index is financing costs and tax on fiscal year dividends realised.

 

[DeepState]

Amazing....just a simple chart and so many reasonable conclusions.

Anyhow, here's my

The chart is an accurate, if rescaled, representation of a portfolio consisting of a broad array of stocks listed on the ASX and weighted according to capitalization (more or less). It includes reinvestment of cash dividends at ex-date and other reconstructions or corporate activity. It is largely an achievable result, subject to brokerage and spread, on a pre-tax basis on the basis of some reasonable amount of capital at the outset.

The key issue I see with a chart like this is that 50% falls in the market at more recent dates will look much larger than 50% falls back in the day, when the index level was much smaller. See for example how irrelevant the Oct 1987 fall looks. It was hardly irrelevant then.

In charts like this, when used to offer an indication of how returns might feel like, they are often 'log-adjusted'. By doing this, a 50% fall actually looks like another 50% fall which occurred at a different point in time.

But, VC was trying to illustrate compounding effects, and the representation provided is fair in that regard.

 

[Value Collector]

That's a good example of how a chart can be a bit misleading. Because it goes from January to January every five years, it omits the peak during the latter part of 2007 where the All Ords went to 6800 before beginning the great fall of the GFC.

Not really, time along the bottom is Jan every 5 years, But the chart wriggles a lot between those points, I actually think its a monthly chart.

Even if it missed the exact peak of 6800 I can't see how this changes anything, If she was following the strategy I would suggest to her she would have been steadily allocating for years before and continue years after, the peak and crash wouldn't affect the long term results.

I mean the few dollars she allocated at the peak, would be offset by the chance to allocated more dollars at the bottom later on. Even if she started her regular savings plan right before the peak she would do very well.

 

[Value Collector]

even so, still great as you can realise you can buy it now at the same price as 7 years ago;
And we are talking accumulative I believe

factor inflation and it is a great bargain to buy now: more than 20% less in real dollars than in 2007.

just a side kick to the perma bull and the figures used in your super website "calculator"!

actually that chart finished 18months ago, its much higher now, 3 dividends and 25% price gain.