jmsnz
22-03-2016, 07:07 PM
There is a really interesting thread over here - http://www.sharetrader.co.nz/showthread.php?10542-Average-age-of-investors - that is in danger of being hijacked by another really interesting topic, in why so many people have so much exposure to property, and so little to shares.
I have a few theories that may or may not hold water:
a) We don't have a history of teaching financial skills/knowledge from an early age
b) People will gravitate to areas they know about/feel they have knowledge and skills in when they are making investment decisions
c) Given those 2 things, everyone immediately thinks they know more about property than (for example) Xero's share price (and TBH they probably do)
d) Many of the population that are of an age to have a reasonable level of investment funds know about or directly experienced the '87 crash, the 18%+ mortgage rates, finance company debacle which are more reasons to gravitate back to what they think they know
e) Leveraging shares is harder and more risky that property so you can't build large value share portfolios like you can property
f) You can see how much you have gained/lost on shares today which you can't on property and given that it is easier sell shares you are more likely to realise share losses than property losses, though having to realise a property loss is much more painful
For me I think that the country is the poorer for not having a better general financial IQ.
So why are we in love with property and how many here get their passive incomes from property rather than shares?
I have a few theories that may or may not hold water:
a) We don't have a history of teaching financial skills/knowledge from an early age
b) People will gravitate to areas they know about/feel they have knowledge and skills in when they are making investment decisions
c) Given those 2 things, everyone immediately thinks they know more about property than (for example) Xero's share price (and TBH they probably do)
d) Many of the population that are of an age to have a reasonable level of investment funds know about or directly experienced the '87 crash, the 18%+ mortgage rates, finance company debacle which are more reasons to gravitate back to what they think they know
e) Leveraging shares is harder and more risky that property so you can't build large value share portfolios like you can property
f) You can see how much you have gained/lost on shares today which you can't on property and given that it is easier sell shares you are more likely to realise share losses than property losses, though having to realise a property loss is much more painful
For me I think that the country is the poorer for not having a better general financial IQ.
So why are we in love with property and how many here get their passive incomes from property rather than shares?