Lure of property is strong but it's not a sure bet

Let's face it: property is the investment many Kiwis consider the best for preserving the value of their nest egg and generating money.

But putting all your cash in bricks and mortar might not be the best move.

Before you buy that nice little renter, ask yourself if you have got a good split of cash in the bank, fixed interest investments in the longer-term money markets, property and shares.

You might own your own house with or without a mortgage, become wealthier as it rises in value and like the idea of being a landlord.

But professional investment advisers encourage their clients to think about diversifying risk and returns when they choose what assets to buy.

Understanding the four asset classes is the first stage of diversification. Often, when one asset class goes up, another falls. And the Government is encouraging people to think less about gearing up with big borrowings to buy houses and instead to think more about savings.

Spreading your money spreads your risks. Having everything in a single asset class like property increases your risk.

To read the full NZ Herald article, click here

Posted: 16 Aug 2010

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