by The Investor
on June 16, 2009
I think the time has come to buy commercial property. And almost nobody agrees with me.
Hooray! The fewer buyers now, the merrier my eventual returns!
Commercial property is a core asset class. Yet most private investors only consider buying property after a long boom – when the fund industry is crowing about years of double digit gains, when their house’s value could pay off a small island nation’s national debt, and when they can’t even find their office because of all the new developments on the way to work.
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by The Investor
on June 12, 2009
Property has bond-like qualities, in that it represents a solid asset that produces an income via rents, where the yield rises as the price falls and vice-versa (provided the rental income doesn’t fall, of course).
Property also offers some of the rewards and risks of equities:
- The opportunity to make long-term capital gains
- The potential for income to rise over time, ahead of inflation
Bricks-and-mortar property offers some diversification away from equities.
It is also theoretically simple for experts to value, consisting of physical assets with a quantifiable replacement cost, compared with the murky world of equities, although this certainly doesn’t make property immune from wild fluctuations in value, as seen between 2006 and 2009.
While the expected rewards will be lower than with equities, on balance these traits make commercial property a core asset class in my book. It is particularly attractive to anyone seeking income.
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by The Investor
on June 10, 2009
A few people over the past 18 months have shaken their heads sadly when I’ve said I’ve been buying shares during the bear market.
You might think they were proven right when I was buying in early 2008.
Or you might think I proved them wrong when I was bought at the bottom in March 2009.
Actually, I don’t think either view is right: it’s all hindsight speaking. Timing market direction to pick the exact bottom is near to impossible, which was why I bought throughout the slump.
But I’ve also realized more recently that I’ve got a fundamentally different view on where the stock market is compared with most CNBC pundits, fund managers, and Internet share traders.
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by The Investor
on June 6, 2009
Some interesting financial and investing posts I ran across this week, plus a few decent articles from the newspapers.
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