There are 4 huge asset classes that is very developed in the financial market. Share, bond, currency, and commodity. Each of them is highly traded in their respective exchange, among those stock is one that shown to beat inflation and has one of the highest returns over the long term. It is also widely discussed by academic, economist and government think-tank.
Because what is behind a stock is company and its business contribute to the country in term of tax income and jobs.
In Singapore, it seems most people would prefer investing in properties as our parents have experienced its increased prices over the years, and collecting monthly rental income has always been a dream of the retiree.
However, studies have shown properties returns do not outperform stock market returns. If I didn't recall wrongly, properties annualized returns over the past 20 years is somewhere about 4-6%. More importantly, for investors it is the accessibility and liquidity that make stock investing attractive.
Property investment requires hefty initial capital which is not accessible to many and low liquidity means you cannot sell off your property investment in short notice. A couple thousand dollar of monthly rental income may seem attractive in dollar term but that is because of the large capital investment rather than its attractive annualized returns (in relative term). And not forget that property is financed under a mortgage, hence there is a risk that the bank may pull out its loan when times are bad. Interest expense and property maintenance cost can also eat up a large chunk of your rental income as well.
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