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Would you invest in the stock market or property?

Discussion in 'General Discussion' started by inferno, Feb 12, 2016.

  1. dowie

    Caporegime

    Joined: Jan 29, 2008

    Posts: 44,967

    in some cases yeah... but it probably isn't a good idea to use that sort of leverage - you'll tend to get the much higher levels of leverage via a CFD or spread bet

    for cash equities you're looking at more like 25% margin... so the OP's scenario of having 100k and wanting a 350k position is still feasible
     
    Last edited: Feb 12, 2016
  2. anything I don't mind

    PermaBanned

    Joined: Dec 28, 2009

    Posts: 13,054

    Location: london

    I think buying property is a good investment it just the tax situation in the UK disincentives buy to let and the banks do as well to some extent. If you already own a home and live in it then i would spend as little as you can in deposit in buying a house and then try rent it out. Keep the rest in high interest accounts for the large part. I would probably invest some of it in stocks as well. What to invest in is debatable depending on the amount of time you want to spend on it and how much return you are expecting. Once you have a positive cash flow coming in and you have savings you will always be in a more comfortable position than just having savings. Once you have income generating assets like a rental property or a stake in a business then putting some of your money in to gold or silver is a good option.
     
  3. lee1101

    Wise Guy

    Joined: Nov 18, 2011

    Posts: 2,204

    Location: Kent

    Would have doubled your money :D
     
  4. BombayMix

    Wise Guy

    Joined: May 24, 2008

    Posts: 1,112

    Er stock prices go down, have you not read the news recently? If you invest in oil or Quindell (A forum fav) you would off lost lots of money.
     
  5. martin363

    Gangster

    Joined: Jan 18, 2012

    Posts: 490

    Location: Ho Chi Minh, Vietnam

    BTL is a lot more costly going forward with the changes to tax relief on mortgage interest relief between 2017 and 2020. From 2020 most accountants agree that to break even on a typical BTL you must have no more than 60% debt. And that is the BREAK EVEN. Debt free landlords, or low debt landlords are the only ones who will likely successfully operate a profit after 2020.

    Of course, capital gains is influenced by the market too, and how will the changes effect the market by then.....

    However the key to a successful BTL is simple. Buy at the right price.

    I would also say that you should have a clear aim. Is you aim capital growth, or yield? It is rare to be able to max both. You can get a balance of both, or focus on one or the other, but rare to find a way to max both.

    Martin
     
  6. Aldav

    PermaBanned

    Joined: Sep 5, 2015

    Posts: 602

    Seriously?

    Stock prices can go down as well as up. And companies can go bankrupt entirely. Put £100k into 'safe' bank stocks like Lloyds or RBS just before the 2007/8 collapse and then compare to their value a month later, or now. And if you bought Lehmans instead?
     
  7. Aldav

    PermaBanned

    Joined: Sep 5, 2015

    Posts: 602

    There probably are plenty who "could". But I'd sure hope any who could actually advise, rather than just comment on a hypothetical forum question, "wouldn't" without knowing a lot more about the OPs full situation, including how risk-averse they are.

    Personally, I wouldn't dream of taking investment advice from anyone without knowing how well qualified they were to offer it, and I would advise others not to either. There may well be plenty here who "could" advise competently, but we have no way of knowing who they are.
     
  8. Basher

    Soldato

    Joined: Oct 18, 2002

    Posts: 7,415

    So can house prices :confused:
     
  9. Diddums

    Perma Banned

    Joined: Oct 24, 2012

    Posts: 18,783

    Location: London

    I reckon the property market is going to collapse like a house of cards any day now. We can't sustain-ably live in the bubble we're currently in.
     
  10. HEADRAT

    Capodecina

    Joined: Oct 18, 2002

    Posts: 18,141

    Location: Cambridge, UK

    I don't think a house can go bankrupt though ;)

    While I agree there could be a "correction" I think current supply/demand will keep house pricing high, also the fact it a good investment vehicle.

    The chance of you losing all of your capital investment in a house would be very low, I guess something that insurance wouldn't cover war/act of god etc. is conceivable
     
    Last edited: Feb 15, 2016
  11. Rossi~

    Capodecina

    Joined: Nov 5, 2010

    Posts: 19,565

    If playing the short game, then stock market. Long game i would've thought property would be a better idea.

    Though i am not an expert in the subject, so not entirely sure.
     
  12. BombayMix

    Wise Guy

    Joined: May 24, 2008

    Posts: 1,112

    Repossession?
     
  13. D.P.

    Caporegime

    Joined: Oct 18, 2002

    Posts: 30,458

    House prices also go down, ever watched the news and heard of the record number of foreclosures after the recession?

    What matters is the long term average gain, the stock market does far better than property.
     
  14. D.P.

    Caporegime

    Joined: Oct 18, 2002

    Posts: 30,458


    Someone else who obviously didn't watch the news.

    It's very easy to loose your house and your entire life savings. Fail to keep up with those mortgage payments and prettry soon the bank is selling of your house o the cheap with no guarantee you will get any of your capital back.
     
  15. mid_gen

    Sgarrista

    Joined: Dec 20, 2004

    Posts: 8,825

    Spread betting, very easy to get into leveraged stock market trading.
     
  16. Cosimo

    Man of Honour

    Joined: Jan 9, 2007

    Posts: 163,701

    Location: Londinium

    Foreclosures really did hit hard in your American market and much more so then repossessions here in the UK. Don't you lose everything over there?
     
  17. HEADRAT

    Capodecina

    Joined: Oct 18, 2002

    Posts: 18,141

    Location: Cambridge, UK

    Only if you have a mortgage, what about if I just buy the house outright, I could buy a small 2 bed for £100K (as per OP).
     
  18. D.P.

    Caporegime

    Joined: Oct 18, 2002

    Posts: 30,458

    Yes, the bank repossesses, kicks you out and will sell the house as quickly as possible. Foreclosed houses go for 20-25% less than market rate, and the market rate had dropped 10-15%. Many families themselves in negative equity, the putstansing mortgage worth more than the house. Once sold by the bank the didn't get a dim back, all their life savings lost forever and possible bankruptcy filings.
    If you put money on the stock market, somerhing like a FTSE tracker you just waited a few years and found yourself with far more money than before the recession.it never take that long for the stockmarket to recover and surpass the previous peak.
     
  19. EddScott

    Sgarrista

    Joined: Oct 18, 2002

    Posts: 8,204

    Location: Pembrokeshire

    Isn't the change just a flat rate 20pc claim on mortgage interest?

    I must be missing something because as far as I can tell it's really only 40pc tax payers that would be affected.

    And isn't it more to do with mortgage payments Vs rental income rather than equity stake in a property?

    The changes can't be that much of a put off considering the amount of BTLs going through now to avoid the introduction of 3% stamp duty.
     
  20. D.P.

    Caporegime

    Joined: Oct 18, 2002

    Posts: 30,458

    House prices can still go down, and you can still experience significant costs reducing your capital. Just general wear and tear might mean you will have to pay 30k for a new roof, or subsidence might mean expensive foundation reinforcement, windows need replacing, damp problems.

    A house next to my aunts was left unoccupied for several years while it was thought over in an inherited case. Before the it was settled the house had become a ruin amd was eventually just knocked to the ground and the land repurposed. Property requires constant maintainaince and repair. You have to fa tor those costs in.

    Property has a cost and a risk with typically lower gains. Which is why investors don't all buy a load of property and instead buy stock for the most part. If property was always the better outcome then that's where investors would.focus, but they dont.