Investment options

[Archer]

So what am I missing from the property guys (except that buying a house in Sandton beats the growth of an average house....similarly, buying specific indices beats the ALSI) ?

In 1966 you'd have invested close to R0 most likely (110% bonds). And you're missing the rental income

edit: the distinction I'm making is that the house you live in is typically not an investment in SA (it just happens to appreciate in value), but something you rent out is.

 

[Hamster]

In 1966 you'd have invested close to R0 most likely (110% bonds). And you're missing the rental income

..and levies, maintenance and taxes - but fair enough since the shares in that example include dividends and interest earnings (R600 without). Still don't see it coming close in real terms.

 

[Archer]

..and levies, maintenance and taxes - but fair enough since the shares in that example include dividends and interest earnings (R600 without). Still don't see it coming close in real terms.

If I needed to invest R0 to go into property, I'd still have R1 left over to invest in the JSE The winner is obvious

And I'd calc the rent - you'll be surprised, my calcs show it surpassing the JSE by ±20% with heavy taxes and other costs

 

[zerocool2009]

So using these as sources:
http://housepricesouthafrica.com/
http://www.omwealth.co.za/pdfs/default/Articles/Chart-LongTerm-investors-love.pdf

So if I do my sums right (and I might be wrong):

If you invested R1 into property in 1966, that R1 would be worth about R134 in 2014 (R1,275,530/R9,516) according to the table
If you invested R1 into the JSE in 1960, that R1 would be worth R6566 in 2013

So what am I missing from the property guys (except that buying a house in Sandton beats the growth of an average house....similarly, buying specific indices beats the ALSI) ?

Well, think the best ever return I have seen ... if you invested R100 000 in naspers in 1994 ... you would have had R25 000 000 today. That is 21 years ago

 

[Hamster]

Well, think the best ever return I have seen ... if you invested R100 000 in naspers in 1994 ... you would have had R25 000 000 today. That is 21 years ago

13486% in 11.5 years. So if you had R100,000 in October 2003 and had the forsight to invest in Capitec and sell in April 2015 your most difficult decision right now would've been whether you are taking the yacht or jet to the holiday home in the Bahamas.

 

[Pitbull]

Well, think the best ever return I have seen ... if you invested R100 000 in naspers in 1994 ... you would have had R25 000 000 today. That is 21 years ago

It's easy to select an exception to the rule.

How many people lost BILLIONS when the markets crashed?

 

[Hamster]

It's easy to select an exception to the rule.

How many people lost BILLIONS when the markets crashed?

A big part of that is people just FREAKING out and selling everything. To put 2008's crash into perspective...




Can;t find a better graph. If anyone knows where to get a JSE performance graph for historic data ... pwetty pwease lemme know

 

[FrankieK]

It's easy to select an exception to the rule.

How many people lost BILLIONS when the markets crashed?

The only people who lost money when the markets crashed were those who panicked and sold. Those who kept on buying as the markets crashed made billions.

Edit to add: It's in the first line of Hamster's chart above.