Given that you only have enough capital for just one type of investment, will you invest in Property or Stocks? I have been asking this question again and again as I want to seek a better option to invest my limited capital to create wealth for my retirement fund. I am sure you too asking this question.
Size of Investing Capital
Even if you only have smaller investing capital, you can easily without using any leverage to start investing in stock market; but, unlike investing in property market, you will need a fairly larger capital, and use certain degree of leverage to get started.
You may wish to read earlier posts on leverage:
Quick Entry and Exit
For stock market, you can be very short term or very long term or not so short term and not so long term. You may even to be out within minutes, if you manage to get a good return on it.
Unlike the property market, where you have to go through a lengthy procedure of acquiring a property and then again go through another lengthy procedure when you want to sell it off.
Ease of transctions
Given the power of the Internet, you can easily sit in the comfort of your own home or secretly in the office, and be able to invest in stock market. You only just need to click a few buttons on your brokerage portal and transaction is completed. You can never click a few buttons to complete your property transaction, can you?
For stock market, you can literally start a new transaction every trading day.
I always remembered my Finance Professor once told me this: "For property investment, if you got it at the wrong Property market cycle, you are going to work many, many hours of labour for free". You have to get it right and there is little room for you to learn from repetitive mistakes.
But, for stock market, you can afford to make repetitive mistakes and still be alright, and hopefully you learn enough to be a smart investor.
Power of Compounding
Yes. You can let the Magic of Compounding works for you in stock market. Not sure as a small investor can you really able to flip property for compounding effect?
Oh. It is going to be a long story to tell and if you may wish to continue the rest of story on Property stuff in your pleasure reading ...
My final answer is:
For limited capital and without resorting to leverage, investing in the stock market is a better option to get reasonable good returns. Hmm ... some of you disagree. Cheers!
MY PORTFOLIO - Average Cost Price (SGD) % of Portfolio STI ETF 2.78 24.79% DBS 15.00 19.21% SGX 6.99 12.57% Jumbo 0.54 11.67% Far East Orchard 1.52 8.37% Cash – 23.38% Af...
1 hour ago