Q&As: Have you got what it takes to borrow to invest in a share fund?; How frequent traders in international shares will be taxed under the new rules; How Inland Revenue might catch property traders.
Property backers underplay risk. Property backers seem to go in for hyperbole. Two examples from readers’ letters: “Shares are not and have never been as lucrative as property…. We now know why the richest people in the world and in NZ are property investors.”; “The average person can quietly work themselves into a residential property portfolio worth several million dollars with a decade or two of judicious acquisitions…. People putting a portion of their income aside to buy into share funds are left in the dust.”
Readers rally to back houses. It always happens. Whenever I write about investing in houses and shares in the same column, people say I’m unfairly negative about houses. In my final column last year, I wrote that the rise in house prices over the previous year was slower than the rise in: New Zealand shares, hedged overseas shares and unhedged overseas shares, all including dividends. That surprised me, and I thought it might surprise you.
The inherent differences between property and share investments. There’s a fundamental difference between investing in shares and property, a reader says in an email. “With a stock there is always the risk of bankruptcy of the entity you invest in, and the investment you make becoming worthless,” he writes.