Negative Gearing

[dingdong]

quote:Originally posted by duncan macgregor

i will let you tell me why i am so rich and stupid. macdunk

You surprise me O Kilted One. I didn't know you were rich.

[Tim]

Yes, but yields are now very low, we seem to be approaching the top of a property cycle perhaps global shares will be better. You cannot borrow on shares like property.

[Dough Boy]

quote:Originally posted by Tim

Yes, but yields are now very low, we seem to be approaching the top of a property cycle perhaps global shares will be better. You cannot borrow on shares like property.

Ahh but remember if you borrow on stock you are leveraging on a investment that is already quite often leveraged with borrowings and or a NTA less than the shareprice.

e.g. if you borrow 50% on a stock in a company that has a NTA that is 50% of the share price (that would be a fairly good conservative investment based on NTA backing) you may find that leverage investment to be not so safe in a 'modest ecomomic downturn'.