How Perception Affects Investing

All / 28.03.2017

When it comes to choosing to invest in property and shares, many issues are the same:

  1. do the research before you buy,
  2. be aware of your investment timeframe,
  3. monitor performance, and
  4. know when to sell.

But there is one big difference and it’s all about perception of risk.

Shares are valued daily so you can see the volatility in prices every time you read a newspaper or visit the ASX website. To some investors these price movements are very distracting and they perceive that shares are more risky. .

Property, on the other hand, is not subject to continuous public evaluation. You only really know the value when a similar property sells or you ask someone to put a price on it. This means investors are more likely to see property as a long-term investment and perceive it to be less risky.

Investments in growth assets – property and shares – should be seen as long-term investments. The real risk to investors is that they become disturbed by price volatility and sell quality investments at the worst time. History has shown that changing asset allocation too frequently can ruin sound long-term investment strategies.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

 

Disclaimer

Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.