09 Mar 2020
Which should take priority? Stocks or a new house? Considering the current market climate, which one is needed?
Hi Anon, there is no better (right or wrong) option since it pretty much boils down to a personal choice. We can look at how both would differ though!
Purchasing a real estate property: Higher initial capital, as Andy has mentioned as well, more to be done due to BSD, professional fees etc. Real estate also requires a lot of research and is not something you can enter headfirst and expect immediate results. Besides appreciating in value overtime/yearly, I like that you can yield from rental appreciation benefits too as you get to charge more rent with inflation.
Investing in stocks: Lower upfront capital but subjected to risks such as economy, inflationary and market. A more risky investment in that sense! Stocks are however, more liquid and can be easily bought and sold, a higher possibility of you relying on them for emergencies.
If you were to ask for my personal opinion, I would go for a condo if I have substantial capital for it since I prefer the idea of a 'tangible' investment and feel that it is easier to mitigate or control matters related to real estate (tenant queries, renovations). To me, it 'holds its fort better' as compared to stocks with volatile market changes, all of which will not be within one's control. I would encourage you to do thorough research before going ahead with either option though, all the best! :)
If I have an existing shelter over my head now, then I will choose the stock market. This is because I can build a strong and well-diversified portfolio with the cash that I have (for the condo).
Accordingly, I reduce my investment risk and liquidity risk.
However, if I choose to buy a condo (on mortgage), then my remaining money has to work harder for me to repay the debt and earn a return for me. Also, I may be subjeted to more risk than just having a well-diversified portfolio itself.
Hence, I will choose the former.
Here is everything about me and what I do best.
Personally I would go into the stock markets to capitalize on the market correction during this peri...
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