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It will not have escaped your attention that both share prices and property prices are both well off their highs and are now trading at very low levels, some would say bargain levels, but which is currently the better investment?

Well in the very short-term I think both share prices and property prices could fall even further so there’s no need to start throwing your money into the market in the belief that you might miss the bottom. However it is a good time to start planning your investment strategy because there could be substantial gains to be made in the coming years.

Both could bring high rewards but I personally always favour stocks simply because they are more of a passive investment. You simply buy shares in the companies you like and automatically collect any dividends. With property, however, you need to maintain your properties and of course find tenants in order to actually earn any ongoing income from each property. There is also the small matter of paying for any repairs and maintaining each property, which can really eat into your rental income.

The only problem with stock market investing is that your choice of company and timing of your share purchase is absolutely critical. You need to first of all find high quality companies that grow their earnings and dividends every year, and you need to get your timing right because it’s pointless finding good quality companies if you invest in them right at the top of the market when they’re currently overvalued.

This is why now is an excellent time to start drip-feeding your money into quality shares in my opinion. There are a lot of bombed out shares out there that have seen their share prices decimated in recent months and as a result are currently trading well below their true market value. If you can get your timing right and hold onto these quality shares for a few years, then I personally believe that you could easily double your investment in certain shares because they have been sold off so much.

However I think you will have to wait an awful lot longer before any property doubles in value, which is why I personally believe that shares (in good profit-enhancing companies) currently offer much better value than property, particularly if you reinvest any dividends you earn along the way. Both should rise in the long-term but I think shares currently offer potentially greater returns.

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