The Singapore property market has been creating alot of media coverage lately. Numerous advertisements in the major dailies have surfaced amidst the ‘buying frenzy’. In contrast, the talking point in the equities market has been over the sustainability of the rally. What are difference between property investment and equities (stocks) investment. Below is a brief discussion.
Lock In Purchase Price In Property Investment
The purchase price is locked-in once the investor signs on the dotted line in a property transaction. This can be a boon or a bane. If the purchase has been done at the bottom of the market, the returns could be lucrative. However, the opposite is true if the timing is wrong. Property investors who entered the market in 1997 are still suffering paper losses (not considering rental).
In the case of investing in equities, the purchase price can be spread over a long period using a Dollar-Cost-Averaging (DCA). Periodical purchase can be done over time. This reduces the risks of buying at the market high. Of course, the investor would not be able to buy at a lowest price either.
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