I would say “rob” is a very strong term but it is a way to tax savings to fuel debt. Not saying it isn’t justified to support our export economy, but it does taste a bit sour. The flight into real estate is another consequence of low rates that may yet show some negative ramifications.
Edit3: Aaaaaand, I may have misread once again. If the concern was about interest rates trending down through time, then ignore everything below and my apologies. /Edit
I don’t have a cristal ball and am not learned in the ways of real estate but my understanding is that if interest rates raise, mortgage rates raise, which could put some owners in a tough spot (those who never amortize the 2/3 that they don’t need to), which could force some quick sales, which could take the price of real estate down, which could temper with the balance sheets of pension funds, which could have other consequences I can’t foresee.
Taking on a mortgage could mean that the value of your flat gets reassessed and you have to quickly amortize the difference between the new value and the 2/3 mortgage you can afford. If you keep some room in your mortgage and don’t take a 66% one, this could serve the purpose you’re trying to give it. If you take a mortgage to the sky, then it may not lower your risk exposure (emphasis on “may”: there again, I’m no specialist).
Edit: it may be more interesting to buy some farmland, provided you can legally do it (because it’s very protected, so that’s not really an easy task). It’s already dirt cheap so shouldn’t fall much lower and should act as a decent store of value that you can lease to get some income out of.
Edit2: if you want a real doomsday scenario, you could add loosing your job at the same time, that’d mean your income would decrease and banks wouldn’t agree to lend you as high a mortgage as you previously could so potentially more forced amortization at the wrong time.
No no, my concern is stagflation. Prices keep going up and your stock price stays the same for years.
You mean rise you raise something and so it rises. Yeah, I know what you mean. I guess it could be a good moment to get into the real estate market, because after an interest rate raise the bubble would pop. On the other hand, you could also say goodbye to cheap loans. But it’s better to pay 2% on 1 million than 1% on 2 million
I don’t even know how it works in Switzerland. In Poland farmland used to be very cheap, like 0.20 CHF per sqm. Then they limited farmland purchase to “farmers”.
That I do. I’d say my English is rusty but, really, it’s my brain that’s drowning in coffee. I’ll get some sleep after I FIRE and then, I’ll start writing properly. ^^
It’s pretty much the same than in Poland. Prices are kept low because it’s a farmer’s working tool and they need to be able to afford it. Most of it is protected by law so you need approval by the state to buy it. The main condition to get it is that you can prove that no farmer wants to purchase it. It’s usually doable for small pieces of land (I own a small vineyard) but gets difficult for good farmland worthy of farming.
Yes, like @Wolverine says, it’s very regulated.
I’m part-owner of some farm-land in a dairy-cow farming / near-alpine area.
For selling, the max. allowable land-price would be defined by the authorities, and in our case it was a hefty Fr 1.50 per m2. . (I’m sure in a more arable land area, where u can plant a field of corn or whatever it’s worth quite a bit more).
Based on this value, the gross return is about 2% p.a. from the “rent” the farmer pays us. After insurance, some fees for this and that etc maybe 1.5%.
Not a great investment
Every 10 years or so maybe a small bonus, when the electricity company wants to run new high-voltage cables across the field, or bury underground ones on the land.
Big bonus would be a re-zoning to Bauland, but ja, is rare, not in my lifetime.
It doesn’t matter.
The acronym is arbitrarily chosen.
It might be becoming outdated already. At least as an acronym for high-growth stocks.
Facebook’s growth has been decelerating for a while.
Google’s growth trajectory has flattened as well, with not that much more than 10% growth in 2020, despite having begun relentlessly bombarding users on YouTube. There might be some growth potential in developing countries - but then, some of the biggest (China, India) have shown little qualms about restricting or banning them on their national internet - or behind their great wall.
Apple is primarily a smartphone manufacturer. They’ve been stumbling in services often. And the smartphone revolution might have largely played out (its growth potential) already.
Amazon is a business that’s has notoriously been low-profitable.
And Netflix stock price growth has also considerably outpaced it’s revenue growth over the last 5 years.
One the other hand, stock index returns have been considerably driven by the likes of TSLA or NVIDIA. The latter having tripled its revenue over the last 5 years - but its stock increase 15-fold.
Who believes that growths in stock prices outpacing growth in companies’ revenues by multiples is sustainable over years?
In my understanding growth stocks spiked because of several factors:
Most of them are sectors little affected by COVID, or that actually benefited greatly from it
Low interest rates means that future cash flows are more valuable today. At 0% interest rate in theory is the same CHF 500 today or in one year
Many retail investors have more capital to invest because restaurants and travel is hugely restricted
There is a generational shift in investors. And even the great Warren understood that the companies to be in, with great potential returns, are disruptive ones (Snowflake, Stone), not companies with interesting ratios…
This doesn’t seem to be supported by the evidence. New Technologies often don’t give great return for investors. There is a good video from Ben Felix about it:
Generally for investors it is the return per share that is relevant, not the total return. If a sector grows by a factor of two and the number of shares grow by the same amount, then the investor doesn’t really benefit from the growth of the sector.
I like Ben’s videos. I learn a lot from them, and I have a big allocation in passive EFTs.
I disagree with this vision based purely on statistic. I looks like every fund manager picks randomly their stocks. Is like saying Messi, CR7 were the best players for a decade because of normal a statistical deviation, they were lucky and did nothing to earn it…
The fact is that Ark outperformed massively this past year. She can underperform for the next few years and probably still be in front.
I’m almost willing to say that more and more stars align… they sure seem to like the imagery at the very least. Curse or not, we’re in for some really interesting times.
I heard in a financial debate, don’t remember which one, that one hedge fund is adopting the strategy of investing at IPO time of various Spacs, and selling as soon as the final acquisition is announced.
Simple but effective profit
In a further hit to SPACs, Palihapitiya, one of the most high-profile SPAC investors, sold his remaining personal stake in space tourism startup Virgin Galactic Holdings for around $213 million.
The biggest risk I see with SPACs is that they introduce companies into the stock market which are not screened the same way than during a classic stock market introduction (and would probably not pass that screening).
Basically another way to circumvene rules and put everyone at risk…
Nice portfolio, mine looks rather similar I also like the Dimensional / Avantis ETFs. Out of interest… Why DFAI and not AVDE and DFAU vs AVUS? Purely TER?
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you raise something and so it rises. Yeah, I know what you mean. I guess it could be a good moment to get into the real estate market, because after an interest rate raise the bubble would pop. On the other hand, you could also say goodbye to cheap loans. But it’s better to pay 2% on 1 million than 1% on 2 million 
. (I’m sure in a more arable land area, where u can plant a field of corn or whatever it’s worth quite a bit more).
Yes, the current growth stock will be at some point Value stocks.
I also like the Dimensional / Avantis ETFs. Out of interest… Why DFAI and not AVDE and DFAU vs AVUS? Purely TER?