galway_blow_in
Registered User
- Messages
- 2,102
hi all
i would love to try and gather some opinion around the topic of diversification as i think it might be what tilts me in one direction or another regarding my current situation
i invested fairly heavily in stocks in 2010 and have done well , however , my income is not especially big and is not guarenteed long term so i decided to cash out of half my equity portfolio a month ago and invest in a commercial property unit which provides and income of 12 k per year which is a 9% yield , ive only recently bought the property but have not paid the balance as yet , i did not borrow anything to buy this property ( cash buy )
this will bring my current income up to around 52 k per year , my only loans amount to 30 k which have three and a half years left
so im wondering if i should cash out of the final 40% of my equity portfolio and approach a bank to see if i could get some money off them and go and buy another commercial property which should also deliver around 12 k per anum
the pros are i increase my income significantly as equities do not pay a very high income if you simply own the S+P and bonds are not paying much either
the cons are whatever commerical property i buy is unlikely to appreciate in value over the next twenty years as a fund which encapsulates some of the largest corportations in the world , that said , i could simply use some of my income from these commerical properties to buy the likes of the S+P a few times per year , the markets are quite expensive right now so perhaps cashing out now has little downside
i guess im asking if income trumps the need for diversification
i would love to try and gather some opinion around the topic of diversification as i think it might be what tilts me in one direction or another regarding my current situation
i invested fairly heavily in stocks in 2010 and have done well , however , my income is not especially big and is not guarenteed long term so i decided to cash out of half my equity portfolio a month ago and invest in a commercial property unit which provides and income of 12 k per year which is a 9% yield , ive only recently bought the property but have not paid the balance as yet , i did not borrow anything to buy this property ( cash buy )
this will bring my current income up to around 52 k per year , my only loans amount to 30 k which have three and a half years left
so im wondering if i should cash out of the final 40% of my equity portfolio and approach a bank to see if i could get some money off them and go and buy another commercial property which should also deliver around 12 k per anum
the pros are i increase my income significantly as equities do not pay a very high income if you simply own the S+P and bonds are not paying much either
the cons are whatever commerical property i buy is unlikely to appreciate in value over the next twenty years as a fund which encapsulates some of the largest corportations in the world , that said , i could simply use some of my income from these commerical properties to buy the likes of the S+P a few times per year , the markets are quite expensive right now so perhaps cashing out now has little downside
i guess im asking if income trumps the need for diversification