There is no doubt that over the last 20 years, buy-to-let property has been a good investment. Landlords have not only benefited from an increase in house prices but rising rents; the average house price in the 1990s was around £45,000, today that figure is close to £250,000. At the same time however, rental yields have moved from 12% of the property value to about 4.5%. It is clear to see how people investing 20 years ago did well.
Why
To achieve above average performance will by definition be in the minority.
Successful long-term investing will therefore require positions to be taken which are at odds with the consensus.
The price of an asset is simply the aggregate of the whole market’s average belief in the future prospects of an asset itself, and of the economy affected by macro factors.
We do not believe that markets are efficient over the short term; we believe that considerable mispricing occurs due to excessive emotions (both positive and negative) and that this provides the thoughtful and emotionally intelligent investor with a significant advantage.
This section features articles which question the orthodox, test the consensus and highlight the anomalous.