We should never lose sight on property investment. While stock market could give you instant gratification, but property investment could give you long term security and satisfaction. It was said that property values will doubled every 7 years or so. I would say there are some true in it.
Stock market is just an entertainment and hobby to me but property investment is the serious making money machine. I have to treat stock market as an entertainment and hobby so that I could take it easy and casual. Too serious in it will affect my body health.
Property has better certainty, well maybe not 100%, to make money in the long term. Say 10 years cycle. On the other hand, stock market gives no guarantee even if you think of long term. Sound contradicting isn't it coming from someone who has been advocating long term investment in stock market. Let me explain. How many stock in Bursa that can withstand the test of time? Not many. I could only think of Public Bank, Genting and probably a few more. It is not a problem to keep these stocks for another generation and you will see your investment grows even if you closed one eye. Even if you closed two eyes, it is also not a problem. I have heard story of parents handed over these stocks to their children after the parents passed on. But for the rest of other stocks, more efforts to understand them are required.
But how many of us could afford to invest heavily in stocks like Genting and Public Bank and for long term of 10 years on top of that? I believe very very few would happily do it. Even for people like me coming from the dinosaur era would find it difficult to do it as well.
What I am trying to drive at is that long term view in stock market should be looked at something that have many stages or definitions, atleast to me, unlike property investment. For young and promising companies, one should take the long term view as 3 years. One has to re-evaluate the company after 3-4 years. Many things could have changed after 3 years. Take for example, the management team could have changed, the attractiveness of the business they are in could have changed, political equation could have changed, the business trends as well as business competition. On this investment principle of mine, I will re-evaluate Presbhd at end of this year when the 3-years cycle completes. If I decided to sell, I will sell all and that's my weakness. But by looking at the rates things are happening with company, I might take my bet for another 3-years cycle.
To side track a bit. Few of us decided to pool our money to start a stock portfolio. Each of us fork out RM75,000. With one pulled out recently, there are only 3 of us now. Thus, we have now a total fund of RM225,000 to start off the portfolio. I named this portfolio as PZJA14M04. I have just made one stock purchase recently and will discuss about it in due course. We intend to keep this portfolio up until end of next year even though I am mindful of 2015. Anyway, there are still plenty of gems to look at. Let's see how we fare by then. Will talk about this later.