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.



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