25 Aug 2021
Australian Residential Property
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
Growth assets as defined by Benjamin Graham (pictured) are assets that can go both up and down in price.
This means that shares in a company are a growth asset and so is property by definition.
The challenge for a vast number of Australians, especially Sydney siders is that they agree that residential property is a growth asset but do not believe that the price can drop which is simply wrong.
The attached research details a residential property in Sydney that is likely to sell below its 2016 purchase price.
Click to read.
What does this tell us?
One, that property prices just like share prices do go down.
Two, the price you pay when investing is what matters. Overpay, even for the highest quality growth asset and it could be years or even decades before you make a profit.
Three, a large amount invested in a single growth asset does not protect your wealth because it offers no diversification.
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