Basking in the Glow of a Good Investment

If you were investing money today, where would you put it?  That’s a question that many people have been asking in these times where just about every investment seems to be sinking.  Evaluating an investment in these tough times is…. tough!

Of course the ‘safest’ option has traditionally been to put your money in a bank.  But recent events such as the Icesave debacle have understandably made many investors skittish about banks.  With interest rates at their current levels, bank deposit accounts are less tempting than they have ever been.  The same low rates have put people off investing in government bonds and fixed interest securities – the traditional escape when equity markets drop.

Unless you know a great deal about the companies you are aiming to invest in, then stocks and shares are an unlikely bet.  Even if you do know, if the whole market plummets, as it has several times in recent months, so will the value of your investment.  For the same reason, the spread investments offered by fund managers are failing as millions are wiped off their values.

The current bandwagon is gold.  But now that all the media have been advising investors to throw their money at it… we are likely to see it go the way of all highly touted investments.  The problem with following the herd into an investment is that it artificially raises its price, causing a bubble ripe for bursting.

Property?  Some might balk at the idea… after all the investor herds are selling up, or trying to.  But look again, and you will see the sense in it.  A good investor buys cheap and sells when it is expensive and there are undoubtedly bargains on the Tenerife property market right now.  Over the medium term, bricks and mortar is undoubtedly a safe asset.  In the last 10 years, property prices in Tenerife have risen 120%.  Compare that to bank stocks over the same period (Barclays down 56%, HSBC down 22%, Allied Irish Banks down 87%) and the property owner is well ahead.  The difference between the two investments becomes even wider when rental income is taken into account.

A very recent survey in Spain found that, despite the credit crunch, 74% of respondents were still looking to buy a Spanish property.   63% of respondents believe property to be the best option for supplementing dwindling pensions over the next 10 years.  Only 10% of respondents had any faith in investing in stocks and shares.

But even with a powerful argument on the side of investing in a property in Tenerife, it is still unfair to evaluate a home in the sun in cold investment terms.  There is much more to owning a property than simply the financial return: there is the enjoyment value.  You, your family and friends will hardly get a tan basking in the glow of the gold bar you have invested in… or enjoy going out for a drink with your share certificate.  An investment in Tenerife property is about good returns and good times, the perfect way to weather out the recession!