Sunday, February 15, 2009

A property Revelation

I have had a revelation lately..

I think I've been buying too much bonds...
I should have allocated the bond money to buying property instead.

Bonds = Income Seeking but limited appreciation and total permanent capital impairment is dependent on the company credit rating.

Properties = Income Seeking but is a control investment with better appreciation than Bonds and permanent capital impairment is dependent only on my ability to service the loan (if any).

Sigh.. such late revelation ..but luckily i still can buy a few properties for a 4% yield plus capital appreciation.
Of course, the equity allocation still remains, I am just re-allocating out of the bonds portion into the properties more. So maybe end of day, the portfolio might be 15% bond, 40% equities, 45% properties.

Though I would think for risk-averse investors, equities shouldn't even be part of the portfolio anymore. You get more safety in property investment than equities.. No wonder a recent study mentioned that most HNW have around 50% property allocation in their portfolio and the pte banks was saying it is too high.. Hmm.. is it really? It is probably the safest investment with no chance of going to ZERO as compared to corporate bonds and equities.

What's your view on this ..any other gurus or non-gurus welcome! Smile

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