SC
"all I know is that the bull market on shares willnot continue forever... the BB's will pull from the market and it will crash... It is a certainty.... It will happen... and I only have a few more years in shares maybe 5 at max....
everyones in shares, why wouldnt they be! we have been through times where picks dont matter because your shares will rise... I am not foolish enough to think that I can continue to make hot picks forever..."
It's funny - one could argue that this statement applies equally to the general property market at the present time (especially per Halebop's commentary on the potential impact of BB's trading down/withdrawing equity).
Don't get me wrong- I'm not a bear on property. To the contrary, I think it very likely that a number of structural factors will keep prices marching upwards for some time. I just don't think it's cheap enough to offer a value buyer a genuine opportunity.
The key to successful investing is to be selective. Despite the frothy state of markets, I continue to find plenty of great stock market investments that are not cheap, but certainly not expensive relative to their long-term potential. It is not at all inevitable that these stocks will eventually "crash".
"I have never had a dividend... I don't chase stocks that pay dividends"
I don't "chase" stocks that pay dividends either. I have found, however, that most (but not all) high quality companies (the type you should be investing in) typically pay at least a small dividend.
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Re compounding... I'm thorougly familiar with the concept. Remember, compounding applies equally to the capital value of shares, and dividends, as it does property values and rents.
A 3% yield on a stock portfolio ($3,000 per $100,000) should equally grow in absolute terms over time as the economy grows and the companies in your portfolio prosper and increase earnings. Based on 10% compound growth, within 10 years this portfolio would be yielding $7,800 in dividends, and have a capital value of $260,000.
If you need more proof about compounding returns in the stock market, do some research on a somewhat successful fellow by the name of "Warren Buffett".
Dimebag