MY DUMBEST INVESTMENT
Send us your smartest or dimmest investment story. If we publish it, you'll get a free copy of the 'Motley Fool UK Investment Guide'. E- mail to UKColumn @fool.com or snail mail to Motley Fool, 'The Independent on Sunday', 1 Canada Square, London E14 5DL.
Years ago, I did three months of back-breaking work to help pay our crippling mortgage. On the final day, looking through the FT-SE index a company name - Poseidon - jumped out at me. The name stuck and wouldn't go away. The crucial question was: invest in our mortgage or buy the shares? The mortgage won. A few weeks later, Poseidon shares started to rocket and quickly went through the roof. I could have bought two houses with the proceeds of the shares.
BG, Oldham
The Fool responds: Perhaps this wasn't such a dim investment decision, after all. Investing in shares should be a long-term undertaking. There are big gains to be made in short-term speculation, but more often there are big losses. The last thing we should be doing is risking our homes on the back of a gamble.
Maybe another lesson here is not to buy "too much" house simply as an investment. In pure investment terms, property has proved a decent investment over time, but the stock market is better. And when interest rates go up (inconceivable as that seems now), an over-large mortgage rapidly becomes a millstone.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies