| It's a very strange economic climate at the | | | | The major drawback with share investing is that |
| moment with stocks at very low levels, property | | | | you have to pick quality companies that grow |
| prices well off their peaks, oil prices down, and | | | | their earnings and dividends every year. If you |
| commodity prices down as well. So if you were | | | | pick a bad company you could lose money on |
| looking to invest your money somewhere, which | | | | your investment and the worst case scenario is |
| is the better investment - stocks or property? | | | | that the company goes bust and you lose your |
| Well the first thing I would say is that I don't | | | | entire investment. Property is of course a less |
| personally think there's any need to quickly throw | | | | risky investment in this sense because every |
| your money into either market because I think | | | | single property tends to move broadly in line with |
| both property and stock prices could fall further in | | | | the overall market, and in the long run property |
| the short term. However it is a good time to | | | | prices will always appreciate in value. |
| start thinking about where you're going to invest | | | | The stock market also tends to increase in the |
| your money when the time comes. | | | | very long term but you still need to pick quality |
| I personally have always been drawn to stocks | | | | companies. For that reason it's very often best to |
| more than property. Both stocks and property | | | | take a Warren Buffett approach and only invest |
| can be potentially very lucrative investments but | | | | in huge market-leading companies that have a |
| the trouble with property is that it requires a lot | | | | long history of increasing their earnings and |
| more of your time and money whereas shares | | | | dividends each year. If you do this and buy into |
| are more of a hands-off investment. | | | | these quality companies when they have fallen |
| For example if you are looking for a regularly | | | | with the broader market, such as now, then you |
| rental income from your property then you need | | | | should find that share investment outperforms |
| to find tenants and take care of any issues that | | | | property investment quite easily, particularly if you |
| may arise throughout the year, including taking | | | | reinvest any dividends. |
| care of running costs and maintenance. Also if | | | | So my own view is that high quality shares that |
| you don't find any tenants, then you won't | | | | are currently trading well below their true market |
| receive any income from your property. With | | | | value based on historical price/earnings ratios are |
| shares you simply buy the shares and if the | | | | a much better investment than property, although |
| company pays out a dividend, then this dividend | | | | it should be pointed out that both share and |
| goes straight into your share dealing account | | | | property prices will be a lot higher than they are |
| automatically. | | | | today at some point in the future. |