Quora Answer: Do You Make More Money, in the Long Term, from Property Investments or Shares?

The following is my answer to a Quora question: “Do you make more money in the long term from property investments or shares?”

This really depends on many factors, from the type of property and shares, to the regulatory and tax regime, to the holding vehicle if any, and your behaviour as an investor.  For example, index fund investing in a mature market will eventually make money because the market trend is always up over an extended investment horizon.  There is higher growth in an emerging market, but there is also greater volatility, and there is that chance that the country might devolve to failed state, or near failed state.

Within the Singapore context, where I am, I see no future in most retail spaces because there is a severe glut in a shrinking population, there is a consistent trend of buying online, and buyer’s habits are changing.  This means extracting a consistent yield from such a portfolio is a great challenge.  However, if that property portfolio is warehouses, cold stores, and certain kinds of commercial spaces, there will be growth in the long term because there is already a shortage, and the growing regional economies will continue to put pressure there.

As you can see, there are so many points of consideration.  There is no either or dichotomy.  As such, it is a viable strategy to diversify and have a mix of both, which many investors already do.