Crazy, WOW, 20 properties in your managed portfolio! Why give up...

Crazy, WOW, 20 properties in your managed portfolio! Why give up while the going is good?
Kara58, thanks for the real estate 101 lesson.

The current Syd/Mel property rally is starting to remind me of the Greenspan low interest rate era after the Asian crisis followed by the dot com boom bust cycles. The low fix deposit return were pushing investors to higher risk assets be it stock market or property. We currently have the same situation but we coin it as yield chasing be it industrial/banks/healthcare or negatively geared rental properties. If next month is what the bond markets are expecting ie. rate cut, watch the higher divvy stocks rallies again including properties as baby boomers are "forced" to seek higher returns.

The reality is that the bull market has not bend yet so no reason to be a contrarian but one day it will. I have no idea what the trigger is and a few guesses have been wrong so far. A lot of commentators have been saying that the leveraged positions in the various asset classes this time around are much bigger than GFC and the problem will be even bigger for the central banks to cope. The US national debt is huge but dependent on which type of economist you listen to it is either manageable or unsustainable.

For my own capital preservation, I am sticking to the 'watch the pennies' approach instead of the 'imagine all that profit' method of investing. Very much on the high side of valuation and no reason why it can't get higher but also respecting nothing last forever! Hence I am on the sidelines on the commodity sectors unless the trend if up and cash producing as opposed to blue sky explorers.

Recent crisis in world event speak like the Japanese property bubble in the nineties to the GFC all had their dna in property. The low or non existent interest environment worldwide only breeds capital in flows to the higher risk assets now running close to 6 years! So far the bond bubble is still going! When those outflows unwinds taking into account the use of heavy leverage, we will get that "Oh Sheet" moment and liquidity dries up. Maybe FFR will be that trigger, who knows?