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I’m in a fund which has a property option – it covers all sorts of property investments.
It has done well compared to other options, but recently took a dip in the last week, probably due to interest rate talks and the media talking property down, etc., however property will always be doing well somewhere. The shares’ fixed property trusts are all deteriorating though.
What would you recommend – that I stay with this investment, or change to another, like fixed interest/international shares?
I’m 50% invested in the property choice.
A: You haven’t told me what sort of property the fund invests in – ie residential or commercial or retail or industrial etc., or all these types.
Sounds like it has done well and you are happy with the performance.
Ultimately, higher interest rates will have a material impact on the property sector – either because it makes it more expensive to buy (most property is geared) or from an investor’s perspective, yields will need to rise to make property relatively attractive compared to other investments such as fixed income. Usually, higher yields are achieved through lower prices.
I don’t think interest rates are going up in Australia anytime soon – so property looks ok to me. That said, I think the best days are probably behind the market, so maybe you use opportunities to lighten a touch and move back into equities. However, only invest in things that you are comfortable with.
Regards,
