[Australia] Overall Asset Allocation: Investment property = Defensive or Growth?

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doctormister
Posts: 13
Joined: Tue Jun 01, 2021 6:47 am

[Australia] Overall Asset Allocation: Investment property = Defensive or Growth?

Post by doctormister »

Context: Australian investor, retiring in Australia within the next 5 years

I am looking to change my AA to be more defensive, as I am nearing retirement.

I am looking at my existing AA across superannuation, investments outside super and an investment property to understand the current AA. I know that I am heavily Growth weighted, just not sure how much as I am not sure whether my investment property should be classified Growth or Defensive (or some ratio of the two). At the moment I have it as 50/50 and that gives me an overall AA of 75/25 towards Growth - hence why I need to rebalance to be more defensive.

Any thoughts would be appreciated
Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: [Australia] Overall Asset Allocation: Investment property = Defensive or Growth?

Post by Valuethinker »

Equity interest in property is a risky asset.

Maybe that's what you call growth?

To the extent that it pays rental income, that is much more stable than equity prices.

I would tend to put investment property in a separate basket than my bond/ equity/ pension split. Look at it as a stable source of income (so your net need is smaller).
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doctormister
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Joined: Tue Jun 01, 2021 6:47 am

Re: [Australia] Overall Asset Allocation: Investment property = Defensive or Growth?

Post by doctormister »

OK. Makes sense, thanks
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