Where Have You Stuck Your Money Lately?

[tig]

Property, previously just rentals, recently development properties on waterfront in queensland. Everyone loves the water.

[Dillz]

In general property doubles ever 10 years, it's a fact.

[Grudgee]

I Australia's recorded history it's closer to 7 years.

7.3 I think.

[RIP85]

just got approved for my first home loan today time to invest some money in property instead of cars

[7MA61]

Stuff property, im going to be buying some banking shares, just started working for NAB, shares have copped a battering in the last 6 months. Buy in when the market crumbles & sit pretty in 12-24 months when it recovers & you double the money.

Property is pointless atm as you would earn the same by throwing money in a savings account & earning 7-8% in interest. Rent would be just covering the interest bill which would make the only gain capital growth.

[Grudgee]

I'm heavily invested in shares and although I'm buying up now, it's not always an option for people, unless they have a financial base to borrow against, or a wad of cash. You can invest in property without too much fuss, as it's lower risk and the bank will let you on if you simply have a deposit and loan serviceability. Go to a bank with only cash and ask for home-loan type $ figures, at homeloan rates, to invest in shares. It won't happen.

2 months ago looked like a HUGE opportunity to invest in some stocks that got hammered. I have a spread across a few sectors and they've all been smashed, some well below half. BNB for example is a corker. It's still profitable, but has dropped from $34 to just over $2. The market can be mean.

[tab]

Grungee you seem like a smart bloke....have you ever dealt with (or looked at) CFDs?

Seems to be just glorified gambling but am seriously considering it.

[tig]

  RIP85 said:

just got approved for my first home loan today time to invest some money in property instead of cars

Good on you RIP, property is good debt, cars as much fun as they can be are bad debt (unless of course you managed to have had an original GTHO sitting in your garage)

cheers

[SCRIBR]

I brought a house

[Grudgee]

  tab said:

Grungee you seem like a smart bloke....have you ever dealt with (or looked at) CFDs?

Appearances can be deceiving.

Contracts for difference offer amazing leverage and allow you to short stocks (if we'd gotten on board with ANY financial stock and shorted it any time in the last 6 months we'd all be rich!) which means you can make a huge earn in a sh*t market. Direction makes no difference, which is super. The part I don't like is the interest charges, as well as the margin-trading setup that comes along with it. You need collateral in case a stock plummets and the losses are magnified as heavily as the gains.

I prefer trading warrants (sometimes options too), as my losses are limited to the initial stake. As an example, 3 months back, I bought BNBIML (a BNB Babcock and Brown call warrant) at $1.57 and it's now worth $0 with no hope of recovery prior to it's October expiry. I did my $4k and that's it. If I used that $4k on a CFD as a 10% down, I would have had $40k stock and unless I saw a plunge coming (in which case you wouldn't have bought call warrants) one of BNB's bad days (-27% today as an example) would have seen me margin called for the balance. Ie. $40k with a drop of 27% = $10,800 loss, meaning I'd have to tip in $6,800 (remembering the $4k initial outlay). You can buy put warrants too, if you want to short stocks, so you still get potential for amazing leverage, limited downside (your stake and nothing more) and the joys of going long or shorting.

In summary, it's 2 shades off glorified gambling. Warrants are 3 shades.