When you look at the pros and cons of investing in stocks and shares versus property you are also, in essence, discussing the pros and cons of investing in traditional pensions versus property in Malta as most traditional pensions are invested in global stock markets.
Most analysts would agree that property was a better investment during a particular year than stocks and shares, however a distorted picture is often provided (unintentionally) to the detriment of property investment as they do not take into account or explain some of the major advantages that property investment has over stocks and shares in the long term.
An analyst would say: Well last year (Year X) average property prices increased 5% and the stock market was up 13% so stocks and shares performed better – this year (Year Y) property prices increased 10% and the stock market was up 5% so property clearly performed better however on an average stocks and shares are performing better.
The reality of this is true and if you look at a short term investment plan in stocks and shares one can come out a huge winner however basing performance on a comparison of just two years with the intention to invest long term may get you in trouble. Stocks and shares can work better for you in the long run should you have the capital to risk for a period of time. The benefits can be exponential however there is a risk and one should always look to a qualified stock broker to guide you if this would be your choice of investment. Just remember the writing in small font at the bottom of the page.
Property in Malta on the other hand, though there are no guarantee’s that it is risk free, has a stronger reputation to provide appreciation and more opportunities over a longer period of time. As long as you can make the mortgage payment, one can rent their property, refinance their property over time and sell at a profit.
The return on investment (ROI) in property, if guided correctly by a professional real estate agent in Malta, can work better for you. There are various opportunities that arise from time to time, that if you speak to the right professionals, and make them understand what you are looking for, will find you a property that will get you a reasonable rental income and in an area that fetches a desirable appreciation.
Banks will not lend you money for stocks or shares because they are volatile, not only can they go down, they can go up but they can also lose virtually all their value in a matter of a day or overnight. If a company is badly managed and there is a lack of confidence in their stocks, it is likely that the value of your stocks will diminish. Obviously, there is a flip side of that coin which means that if you invest in the right stock then the value of your stocks will increase. However, banks do not take a risk on your luck. Property in Malta is practically an institution- the banks lend money on a daily basis for property acquisitions so they understand the property market in Malta and know what a solid investment it is.
The point of this article is not to deter anyone from investing money into stocks and shares but it is only to shed light on the subject to those who may not understand or have an idea. It is always recommended to discuss any matters with your accountant or a professional stock broker.