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Author: mc2fool Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 24196  
Subject: Re: Suggestions on investing a lump sum Date: 07/06/2012 10:07
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Unfortunately I do not know much about shares, but I can give you my opinion on real estate investment.

The difference between investing in real estate and investing in shares is the time frame. Real estate investing is long term, whereas shares are very short term. The pros of investing in real estate is that it is a fixed asset, and therefore does not need any frequent attention. With shares, you need to keep your eye on the market the whole time.


You're right, you don't know much about shares!

There is no time frame difference between property investing and share investing beyond that enforced on property by its illiquidity. There is, in particular, nothing to stop you holding shares for a (very) long time, indeed long term buy and hold is such a common strategy that everyone just refers to it by its acronym, LTBH. The sort of very short term trading you are referring to most people would call speculating, rather than investing.

You can buy shares and hold them for the long term and collect the income (dividends) from them, just as you'd collect rent from a property. You don't need to keep an eye on the market the whole time, as no matter what happens to the value of the shares the dividends (usually) just keep rolling in -- and, unlike rent, you don't have to do anything to get the income (find rentors, chase them for overdue payments, etc, etc), and, unlike property, shares rarely need any attention at all, they don't have roofs to be fixed, rentor damage to repair, etc, etc; with a building there's always something! :-)
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