I stopped reading when the ridiculous statement that property will always rise in value and doubles in value every 10 years came up.
Simple (and I mean really simple) mathematics would make it obvious to anyone (who didn't really badly want to believe otherwise) that nothing can continue to rise in price over inflation indefinitely. There will always be a correction at some point.
Especially, nothing can double in price every 10 years consistently and indefinitely.
Sooner or later, the bottom falls out of the market for one reason or another and people get burnt.
While I agree with your sentiment about property values, your statement "nothing can continue to rise in price over inflation indefinitely" is not true, unless I'm misunderstanding something.
It is possible for an asset class to have greater returns than inflation (in fact, most do), but with increased risk. While this increased risk does mean 'corrections' will happen, returns for most asset classes (especially equity) are significantly higher than inflation in the long run. A world in which no asset class could outpace inflation would require zero economic growth.
marcus_holmes|11 years ago
Simple (and I mean really simple) mathematics would make it obvious to anyone (who didn't really badly want to believe otherwise) that nothing can continue to rise in price over inflation indefinitely. There will always be a correction at some point.
Especially, nothing can double in price every 10 years consistently and indefinitely.
Sooner or later, the bottom falls out of the market for one reason or another and people get burnt.
apostate|11 years ago
It is possible for an asset class to have greater returns than inflation (in fact, most do), but with increased risk. While this increased risk does mean 'corrections' will happen, returns for most asset classes (especially equity) are significantly higher than inflation in the long run. A world in which no asset class could outpace inflation would require zero economic growth.
dasil003|11 years ago