Dreamer,

Read my points and make a better conclusion. What I've been saying is this:

1. US economy - caused by subprime => affects everyone there as jobs are axed everywhere, and housing is a need
2. In Malaysia, we get the coupling effect (but in foreign debt, manufacturing, financial not even close to US' level)
3. So in Malaysia, those who get retrenched first will be in these or closely related sectors.
4. For those who get retrenched, what is their equity profile? Some in cash, some in stocks, some in properties.
5. For those in properties (as in own stay), what category of props are affected, ie sudden spike of supply like you mentioned?
6. Are these the target group for property investors? For me, NO. Even for others who are, then wouldn't it be a golden opportunity to buy?
7. The demand and supply usually not come from the same group of ppl. Eg, I would buy a 500k prop to be rented out if the return is good, but I'd never stay in it. Just like I'd buy a 100k apt to be rented out to student.

On the diversification thingy, the same goes for dollar cost averaging, to be is total bunk. Yes I too CHOOSE to not diversify in the way you do. I don't have the numbers that you're holding, but I'd think if one's fall is helped by other's rise (US fall "compensated" by Asia's rise or vice versa), at the end of the day you get more or less the same return, albeit capital has a higher chance of getting preserved. And this is in good times. When times are bad like now, the whole portfolio may trend downwards for a while.

I now compare what's happening to property investment in ONE country, ie our beloved Keris-C4-Malaysia. If I were to compare what I get in stock market, or to look at return in commodities/equities worldwide, I'm still way ahead. They say if the market lose 50% and you lose only 40%, you're actually beating themarket by 10%. Sure, if that makes you feel better. But I want ABSOLUTE return, ie better than FD, better than inflation, better than MOST equity markets. So far, well..what can I say, so the very not shabby at all good! Sure, all the eggs are in one basket, but mind you, even within the basket you can diversify

You are actually also putting all your money in ONE basket, ie equity and spread it across regions/industries etc. I am putting all my money in ONE basket too, ie properties and spread it across diff target market, diff property types etc. If you agree with the last statement, then I'd say you're doing nothing different than I. 

peace out-meejawa

meejawa,

1) You are talking about the effect if it stays within what it is now.  Aka, it did not spread further then what it is now.  Now, what if it spread furthers??

2) Where do the property investors get THEIR money to invest??

     A) Loan

     B) Income from somewhere else

     C) Cash flow from the rental

Now, if the domestic economy went bad, do you think that it will not affect the property investor??  Aka (A) to ©?? Now, if RM crashes, do you think people will not pull money out of the country and cause a liquidity crisis??

If you can do well in property investment, all the best to you.  It is NOT everyone's capability to do that well.

Still does not answer MY question.  What makes you think it will NOT get a lot worse and last a lot more longer??  And, if it does, it will burn out cash from EVERYONE.  So, without cash flow and liquidity, what makes you think the demand will not fall??

For example, your rent room or apartment to college student.  If things go bad enough, the student will go back home and stop taking courses.  What makes you think that Malaysia will escape that??

<<You are actually also putting all your money in ONE basket, ie equity and spread it across regions/industries etc.>>

Equity is just one of my asset classes.  I do bond, REIT, and real estate too.  I do not put all my eggs in ONE asset class either.

<<But I want ABSOLUTE return, ie better than FD, better than inflation, better than MOST equity markets.>>

We are NOT at the same phase.  You are in the wealth accumulation phase.  I am in a wealth preservation phase.  You need to GROW your wealth to reach your goal.  I ONLY need to preserve my wealth to reach my goal.

Earn, save, and invest.

My earning and saving level is HIGH enough that I ONLY need my investment strategy to preserve my wealth.  That is ALL I need to do.  Hence, I do not use your kind of strategy.

Dreamer

Pai,

You CHOOSE not to listen carefully.
Phoeni_142,

That is YOUR SYSTEM.  It is YOUR choice.  It is NOT suitable for me.  Now, it is UP to you to make it works.

<<Let me put it this way.  If I have 8 properties now, I will have 88 properties when I reach 50.  Still ONE BASKET.  Personally, I think that di-worse-sification is way too over-rated and passe. >>

Your choice.  With your associated risk and reward.  If and when you reach that level, you WILL KNOW whether you still think the same.  As per my observation so far, nobody behave the SAME as before and after they reach that level.

<<Don't be too presumptious on how much u think I have.  Well, I only have RM 2,000 as my net worth.  How pathetic, huh?>>

LOL. I know what I know.  And, I know how to verify what I know.

Dreamer

Pai,

You CHOOSE not to listen carefully.

bro dreamer,

1. If hell breaks loose, which investment option is sheltered?

2. My answer is no one is saying it will not get worse before it gets better. Glass half full way of looking at it, it will get better eventually if one has plan to weather the downturn. Like I said, at the situation now, things are still ok, and I'm with you that things will get worse than now. But if and when it does, refer to 1.

Also, if things get worse, do ppl not need a place to stay (I'm not talking abt US level subprime where ppl need to stay in tents in parks). Students will stop their studies? Ppl will move further to get cheaper rent and/or place to stay? Sure (with big chunks of salt), but I don't foresee ppl camping in KLCC park here. Again, diversifying in target market is what I do. And when the hay is made during sunshine, now is the best time to use the buffer to hold and wait out the storm.

Your strategy is different from others who are in the wealth accumulation phase. Is your point here to GROW the wealth, diversification is key? So you not concur this can be achieved in one investment basket in one country? And looking at the global situation now, how is one's wealth preserved?

If you look closer, when you invest in stocks, you're giving your money to the company to invest and hopefully get a decent return. When you invest in mutual funds/unit trust/bond, you give your money to someone who gives the money to the company to invest, hence the money gets "further" away from you. This may be trivial or irrelevant to some, but to me I want to be able to control how and where my money goes, hence the money goes to me who invests it.

meejawa

LOL - you should practice what u preach then.  Di-worse-fication is YOUR SYSTEM.  It is YOUR choice.  It is NOT suitable for me.

LOL - I know what I know about you too.  And, I also know how to verify what I know.

cheers chief.

meejawa,

In my opinion, all hell is more likely to break lose in Malaysia than USA.  Make sure that you have enough buffer to sustain.  I had increased my buffer to 3 years.

Dreamer

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Added on March 25, 2009, 7:26 pm

Phoeni_142,

I am NOT interested in convincing you to use my system.  In this thread, we are discussing about is property going to drop.  And, the best answer so far is it is NOT dropping now.  But, if it get worse, it will drop.

My answer is the indication of the melt down is when GLC and government start VSS.

What is YOUR ANSWER??

meejawa answer is he/she is preparing buffer to ride this out if it happened.

Dreamer

meejawa,

In my opinion, all hell is more likely to break lose in Malaysia than USA.  Make sure that you have enough buffer to sustain.  I had increased my buffer to 3 years.

Dreamer

err..i thought Uncle Sam is already in hell since many months liao?? People camping, Wall street bankers pose for Penthouse..remember? 

nitpicking aside, I don't have much experience in stock investing, maybe you can help to explain something to me. What will happen if the investment house/brokers go bust? I'm always curious, just like here in Malaysia, what will happen if OSK/AmInvest etc go bust, or Vanguard in US (not even sure if they are in the same grouping)? They are the guardian of your money, you pay them loading to help you buy the stocks. Who created the ETFs? What's the worst case scenario?

thanks,meejawa

Please note that there will be opportunity cost for tying down on property instead of good bargaining on share, unit trust and bond which offer a better return in short time due to the high risk factor.

anyone know when the property price will drop since economy is down now....  i plan to get a property if cheap, for long term investment....

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Added on March 31, 2009, 2:57 amgot people view but no poeple reply??

anyone know when the property price will drop since economy is down now....  i plan to get a property if cheap, for long term investment....

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Added on March 31, 2009, 2:57 amgot people view but no poeple reply??

if  u're aiming for hses < RM300k, dun tink the price would really drop much coz its still considered a necessity rather than a luxury. if u're aiming for those high-end properties...hmmm...lets say u should probably set a target for urself and wait to c if it drops to ur desired price rather than asking forumners on when will the property price drop...just my 0.02

anyone know when the property price will drop since economy is down now....  i plan to get a property if cheap, for long term investment....

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Added on March 31, 2009, 2:57 amgot people view but no poeple reply??

http://forum.lowyat.net/topic/741185

hence i think property wont down, government expecting us to take our own money to be "release back" into market (investment) rather keeping the money in fixed deposit...

I respectfully disagree with ya on the statement above, mainly due to :

1. The returns on share, UT or bonds arent guaranteed, in fact you could end up losing money and forced to cut loss or hold for longer term hoping for recovery.

2. Contrary to conventional wisdom, you dont really have to fork out plenty of $$$$ if you can find the right property deal. Just look at deal thrown by many developer's today, it doesnt cost one much capital to own a property today.

3. If you bought a severely undervalued property with medium to long term holding horizon(min 2 years), you would have easily made 100%-200% returns on capital. If you have bought Maytower studio's 6 month ago at 190k, you would have made 100% now.

4. Returns on properties are more than decent due to leverage. UT, stocks and bonds have no such privilege.