yes...that would normally be true....however given the fact property has produced a greater return than shares in the last 20 years it's risk profile (i know i'm a broken record with this---> and again it's just my opinion) has changed. It is an asset class that is now just as risky as the sharemarket in my view. Given that it is illiquid in nature (when compared to shares) and the cycle is longer it's not out of the question that you could see negative real growth or growth at a rate less than inflation for more than a decade (JPN being an example of where this has occurred)...and that investment horizon is just too long to wait for a turnaround and have your purchasing power eroded.
Investing is about capital preservation in the face of rising prices.....the only way it's viable to make low returns for 10-20 years or longer is if the capital base is large. For instance if i have a billion dollars, i'm not overly concerned about leaving it in a 5% term deposit keeping pace with inflation after tax because the interest will be more than i can burn through spending to my hearts content....but if i'm an average guy (i am btw) leaving a few hundred K in a TD isn't doing much to maintain the purchasing power of my dollar.
Property just doesn't seem to fit the bill right now. It looks expensive....then again so do shares. The investment environment right now is dangerous all around. Personally i'm advocating taking profits on stocks that have run hard and keeping cash holdings high if you can't find an investment you are absolutely comfortable with.
