Whipping a dead horse

[Keys]

And?????

How many companies actually disappeared leaving the share certificates only worth burning?

It rings bells with spreading your investments. Note, almost all finance companies went bust with the GFC. How many Ma n Pa investors lost the lot?

[Wayne]

And?????

How many companies actually disappeared leaving the share certificates only worth burning?

It rings bells with spreading your investments. Note, almost all finance companies went bust with the GFC. How many Ma n Pa investors lost the lot?

I suppose its 'and???' to the relevance of 1987 as you raised it.
Many companies did fail and the more greedy people were the more they lost.

In the GFC some people thought they were diversified by having money in different finance companies - wrong.
My shares dropped quite a lot during the GFC, but since I didn't sell I lost nothing. Since I brought more at the dip I made!

[Bobsyouruncle]

To compare shares to real estate is quite silly. Possibility of total loss exists only in shares which is enough in itself to make it high risk.

[Anthonyacat]

To compare shares to real estate is quite silly. Possibility of total loss exists only in shares which is enough in itself to make it high risk.

Sinkhole / volcano under your property. I'd argue total loss.

Cliffside or beachfront properties can totally disappear over time too.

Not to mention governments (corrupt, usually) taking what they want, when they want.

"But those are rare and unusual events!" - as was 1987, I'd argue. But those who were diversified well (across the majority of the exchange) didn't experience total loss of their portfolio, not even close.

Have to remember it's possible to diversity very well in shares with less than $1k; but you'd struggle to diversity in property with 100x that, even leveraged at 80% that's a single house in Hamilton.

[Bobsyouruncle]

That's rubbish those things are insured against. There is just no comparison.

[Wayne]

That's rubbish those things are insured against. There is just no comparison.

And with shares you insure via diversification (to a degree).
The reason it is silly to compare shares and property is because some people are so biased one way or the other that they can't see reason!

[Bobsyouruncle]

Hahahahaha!

[Anthonyacat]

That's rubbish those things are insured against. There is just no comparison.

Well, if we're bringing in insurance, I agree your comparison is rubbish. You simply can't compare an insured risk with an uninsured one.

But you can insure for anything these days; I am sure you could find a product which gives you a payout if your portfolio drops more than X%, or if more than Y% of your companies go bankrupt.

It's probably not called insurance, would be a derivative or an option. But I'm an accountant, not a banker. Fact is, you don't need them if you're well diversified.