Should I Invest in Property or Shares?
If you have any disposable income available to you, then one of the options you might want to consider using it for is investing.
But there are lots of different types of investments available – how do you choose?
This guide is going to discuss two particular investment opportunities that you might want to consider – property and shares.
Hopefully it will give you an understanding of each, and allow you to make an informed decision.
Please note, that whether you choose to invest in property or shares, your capital is always at risk.
You could end up with no return on your investment. Remember, past performance does not guarantee success.
What are shares?
In the most basic terms, a share refers to the holders share in the ownership of a company.
Major shareholders are often involved with making the big decisions within a business, such as who should be the CEO, or hold other important positions. But more shares generally equals more power, so a typical investor, who owns a smaller number of shares, won’t normally have much influence.
Different shareholdings can achieve different investment objectives, depending on the underlying company. A new company experiencing growth may provide an opportunity for a shareholding to increase in value, whereas a mature, blue chip company’s shares may provide a more stable income stream. Each investor will have an idea what they hope to achieve at the outset, and their objectives may change over time. If they do, then shares can be easily sold, and the proceeds used to buy shares that better match your objectives. This does come with a caveat however, that there are fees and charges for doing so, and the market may not be in your favour when you need to restructure your portfolio.
What are the benefits and risks of investing in shares?
The benefit, whether you’re investing in property or shares, is that there is the potential for capital growth or income, depending on how you choose to invest.
And, naturally, the risks are that an investor could lose all of their capital. As mentioned above, there is no guarantee, and positive past performances shouldn’t assume future success.
The risks come down to a number of different factors, the political horizon, economic horizon, the markets and the company itself.
But even if you invest in an area that has seen vast growth in recent times, you may just find that you’ve missed the opportunity by arriving too late with your investment.
What is property investment?
Investing in property is very common in the UK, whether you’re looking to buy properties to sell on at a profit, or to act as a landlord and rent them out.
There are three ways to get involved in property investment:
- Purchase a second property (after your own home) outright
- Get a mortgage in order to purchase a second home (deposit required)
- Pool your money together with that of other investors in order to purchase a property
The last point is the exact service that Cogress offers. By registering with our free platform, individuals can invest a smaller percentage into a high value property.
What are the benefits and risks of investing in property?
Like the equity markets, the housing market also has its ups and downs. But property prices have always increased over an extended period of time in the same way that shares have.
So if an individual is looking to buy-to-sell, then it is possible to see some success.
Even if they go down the buy-to-let route, then over time you have the potential to make a profit from your original investment.
There are risks, of course. The property you purchase might not sell, or it might sell below its expected value.
If the market suffers a downturn at the exact moment you need, or want to sell – then you could easily make a loss.
Every investment has risks. Always speak to an independent financial advisor before making any financial commitments.
So, should I invest in property or shares?
That’s really for each individual to decide.
Both have their own risks and rewards. For those who are interested in property investment, Cogress is able to connect them with property developers throughout London.
Contact us now for more details.