Switching from shares to property

Alexandria Peterson* has been a keen sharemarket investor for the past 10 years and has amassed a solid portfolio worth about $90,000. But rather than stocking up on bargain-priced stocks, the 28-year-old is now pivoting into property.

“I still think the sharemarket is a great way to build wealth over the long term, so it’s not been entirely placed on ice,” she says. “But I feel the portfolio I’ve accumulated is too exposed to market events like the ups and downs of Covid and the recent downturn in the market.”

Peterson adds that share market volatility has “resulted in huge swings in my net worth both for better and worse”. She hopes exposure to property will bring diversity and potentially greater stability to her portfolio.

Explaining her timing to step into property, Peterson says: “Higher rates will likely take some wind out of the sails of property valuations, and I would rather pay a lower upfront price for a property even if it means dealing with slightly higher rates in the coming years.”

Despite the downturn in equities, Peterson is using cash savings to invest in property rather than selling her shares.

“I have seen substantial growth in sharemarkets but also substantial volatility – I have been stung by downturns in 2018, during the pandemic, and especially over the past year. After each downturn markets have come back, so I am pretty comfortable with holding onto the shares I have and adding slowly over time. And getting dividend payments is nice even when your share prices are going down.” *Name changed to protect privacy