Consider shares, property investors told

Long-term data on investment returns should surprise property investors, says Camelot Financial Group, a financial advice firm.

Friday, September 7th 2012, 12:00AM

by The Landlord

Chairman Peter Christensen said shares and equities consistently outperformed property as an investment in figures published by Gosvenor Research, which showed investors with a portfolio of shares were more than twice better off than those who focused solely on property.

Data compiled proves equities have consistently outperforming property for almost three decades; even during tough times.”

The Grosvenor data said investors experience 11.2% growth in equities compared to a 9.2%growth in property returns from a $10,000 investment made between 1971 and the end of 2011.

He said: “Figures show that $10,000 invested in NZ Equities in 1971 grew to $787,128 while capital solely invested in property grew to just $367,352. That will surprise many investors who appear easily distracted by the frequent, short term ups and downs of shares.”

But between 1971 and 1979, property was the way to go as share returns were eroded by a bear market and oil crisis.

But Christensen said since the 1980 double recession, returns from equities outperformed returns from property investment.

“Long term, regardless of events such as the 1986 share market crash and 2008 Global Financial Crisis, NZ, Australian and World equities, all experienced greater growth than residential property’s 9.2%, the figures for equities are 11.2%, 11.5% and 10.5% respectively.”

He said: “If you own your own home, to get the best long term returns, you should spread your risk across other investment choices such as Kiwisaver, unit trusts, managed funds and bonds. Many investors were utterly surprised by the facts, as investment decisions are often made on emotion and family traditions, not scientific fact.”

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