Welcome to a special episode where we dive deep into the debate of which asset class reigns supreme.

Join me and our fantastic guests, Natasha Collins and Adam Lawrence, as we explore stocks, commercial property, and residential property. We'll answer questions like:

Which asset class offers the best returns? How do you mitigate risks in each investment?

And what are the pros and cons of each approach?

If you're looking to refine your investment strategy or explore new opportunities, this episode is packed with insights just for you!

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Welcome to the Invest Like a Pro podcast, teaching you diversified

investing with a simple set and forget approach to stocks and options.

Build inflation beating wealth for your future and recurring income for today.

And now your host, former J.

P.

Morgan investment manager, Manish Kataria.

All right, so welcome everyone today.

We have a special episode with two fantastic guests who are experts in

their field And together we're going to debate and compare asset classes.

So it's not just me talking about stocks We're going to mix things up a little bit.

And so namely we're going to be comparing stocks commercial property and residential

property Now, I know there's there's other debates going on right now So

I thought let's have our own debate and in something that really matters

You and so I promise there'll be much more sense over here compared to the

politicians that we have to listen to.

Natasha, Natasha Collins is our expert in commercial property and will be

arguing the case for commercial property.

So Natasha is a chartered surveyor and CEO of NC Real Estate.

which is a firm of surveyors that specializes in supporting property

investors to build commercial and mixed use property portfolios in the UK.

And her strengths are in asset management.

Natasha is also a property investor.

She has a property portfolio consisting of commercial resi,

And essays in the UK and the US.

And she's also a stock investor and, Adam Lawrence, will be representing

residential property today.

so Adam's a really, he's a prolific property investor and he's an expert

commentator on all things related to.

Property and economics.

if you don't already, you should definitely follow him on LinkedIn,

YouTube, Facebook for his regular insights, which I love.

in particular, he has an amazing weekly publication, which you should

subscribe to, and it's called the Sunday supplements, which takes a

deep dive into property and economics.

Adam's also a founder of.

Partners in property, which is a brilliant community for property

investors, which organizes property and networking events across the country.

And finally, myself, I've been professionally managing funds in

stocks for more than 20 years, focusing on ETFs, funds, and options.

So I'll be making the case for stocks today.

So why did I organize this episode?

So I know most of you will have interest in all of today's asset classes.

and so I know this will be relevant with hopefully lots of insights to

update your investment strategy.

For me, there are only two serious asset classes which deserve consideration

as part of a, your core portfolio.

And that's stocks and property, so property including resi and commercial.

why are they the only two asset classes that should form the

main part of your portfolio?

Because both have a track record of inflation beating returns.

Over the long term, and we're talking decades and centuries, in fact,

and the real test of a proper asset class.

You have to ask yourself, does it generate income and does

that income grow over time?

So stocks, tick that box, we're essentially investing in companies whose

profits grow consistently over time.

And that's why share prices grow over the longterm.

And property generates rent and rent grows over time.

And that's why capital values grow.

Now, of course, each asset class has its own unique value.

opportunities and risks, which hopefully we're going to be covering today.

I'm sure.

So with that, I'm going to pass it over to Natasha.

Natasha, over to you to make the case for commercial property.

Yeah.

Thank you so much for inviting me on this.

I really appreciate it.

So I am a massive advocate for commercial property and there are real reasons why.

Number one, Leases typically for a longer period.

We know what's going on.

We can put in place leases that are landlord friendly.

They make sure that we are getting an income for X amount of years

and that we can control how that income is stacked as well.

Which then leads me on to regular reviews of rent.

At the moment we're seeing a lot more RPI links.

Although I would say that when I do RPI linked rent reviews, we are

capitally collaring them, based upon the current market and what

we can get out of the tenants.

But, also, with longer commercial leases, the ones that are 5 10 years,

you might have open market rent reviews if you feel that, The market is going

to go up at some point, in which case we always are moving our rents in

line with how the market is changing.

Usually we get higher rents and yields as well, and they're paid quarterly, so

often that helps more with cash flow.

Admittedly, over the last couple of years we have got tenants

paying on a monthly basis.

But that's okay.

As long as our tenants businesses keep going and we've got businesses that

really are invested in where they are and the properties that they're investing

in, the properties that they are in, we see that we get rents continuously.

Tenants typically cover maintenance, so they have full repairing and insuring

leases, by way of a service charge, or if they have the whole building,

then they pay for the whole building.

Which means that, as a commercial landlord, I make sure that all I

have as expenditure is my mortgage.

That's it.

The tenant will pay for everything else.

We've got better security with higher deposits and guarantees.

If I've got a poor tenant or poor covenant, then I'm going to be looking

for them to give me a higher deposit.

And you get to ask for whatever deposit you feel is comfortable as

long as that tenant's okay to pay it.

And there are different ways in which you can get that

tenant to pay a larger deposit.

You could say that they can top it up Every single month until X date,

or you can ask them for three months, six months, 12 months up front.

And then if the tenant at some point during the lease beats their

revenue goals or a figure that you set and you agree with them, then

you can give them the deposit back.

So it's a real flexible way of doing it as opposed to a resi where we've only got a

certain amount of deposit that we can get.

Easy to use forfeiture clauses.

If you really want to forfeit a commercial lease, as long as there's

a forfeiture clause in place, you can.

There is caveats there.

The tenant can obviously apply for a relief of forfeiture.

But if a tenant is struggling and doesn't have any money,

probably not going to happen.

Then investment value improves with better leases as well as better rent.

We essentially, we're in control of our investment value, whereas

residential is bricks and mortar.

With commercial, I know that if I put in place a better quality tenant and

I secure my rent for a longer period of time, that yield is going to come

down on that property, in which case I can improve the value of the property.

And that's certainly a strategy that I can do from anywhere.

I don't need to be on the ground.

I don't need to be Anywhere in particular, I just have my spreadsheets, I can work

out what's going on based upon comparable evidence and I know what to put in place

with those leasons to improve the value.

cheaper stamp duty, more tax friendly, less heavily regulated, the the

government don't seem to be going after commercial property as much just yet.

In fact, if we look back to Covid, Businesses were the first thing that

the government tried to prop up.

They just chucked loads of money at, businesses to help them keep going, keep

paying rent, expand their businesses.

I'm not saying that in the aftermath has been great for all businesses,

but certainly the government has been more business friendly.

And finally, it's business to business.

I'm not dealing with someone living in their home, so I can

actually have a professional conversation and we are negotiating

from a professional standpoint.

It's not personal.

It is just business.

Great.

Okay.

Some really good arguments there, Natasha.

One other thing I would add is that commercial property you

can own in your pension too.

So you have some tax advantages, right?

So you can, in SASSes and in some SIPs too.

yeah.

So thanks for that.

What do you think, Adam?

Do you have any comments?

very good.

I'll, I might just rebut a few of those as we go along with my piece, but, very

fair and concise summary over all of the strengths of commercial property.

I, I guess the question for me, Natasha, is that, there are some changes going

on in the world, on the high street.

The way people are working in offices, and those changes are

continuing to happen, right?

So they weren't just COVID related, they will continue over time.

how do you deal with that?

Because, some high streets, lots of empty shops, a lot of offices.

I know the office I work in, it's, there are lots of empty

offices there, lots of voids.

how do you deal with that?

How do you manage that risk?

I don't think that when you buy a property, you should have a set tenant

that you're expecting to go in there.

And very much the commercial property chain trends change every five years.

They've changed every five years since I've been in the industry.

What I was seeing You know, back in the 2008 2009 is definitely not

the tenets that we're seeing now.

So you have to be open to that change.

So when you go out to market with your unit, it's not, I'm just

looking for this sort of tenant.

I'm looking for this retailer, which traditionally we used

to do, and especially when the use classes were more defined.

Now that they're more of an open use class, I would, what I like

to do is I go out to the market and I say, Hey, Actually, what

would you use this space for?

I've got a blank space, it's whitewashed, it's fine, come in,

tell me how you want to use it.

And allowing tenants to be more innovative with my space, or my clients spaces,

means that we fill up these units.

I do not believe that the high street is necessarily dead, but what I do believe

is that people are lazy with their units.

And the other thing that we're seeing is I've Look, the UK

is in problems financially.

A lot of councils don't have a lot of money, but equally a lot of

councils own those commercial units.

And if they cannot afford to do up those commercial units when a

tenant goes out, comes out because the tenant has completely walked all

over them in dilapidation, They're not going to be able to afford to

make that unit into a standard where anybody's going to come in and rent it.

I know, for example, one of mine in Bath.

Next door, the council cannot afford to renovate that

property to open it up again.

as a landlord, you need to be making sure that you are constantly looking

to get that unit back into good condition when a tenant moves out.

That starts when you're negotiating a lease.

That starts when you put in place, hey, this is a condition

I want the property back in.

And then if you're not going to get that tenant, put it back into

shell condition, you're going to be wanting to put some money aside

so that you can do it yourself.

And that is how we are seeing, property let.

So am I worried about the high street dying?

No, I'm not.

What I want to do is make sure that we are giving space

Great.

Okay.

Thank you, Natasha.

I'm going to hand over to Adam because I think that will probably be a good

transition into residential property at that stage to compare and contrast.

So over to yourself, Adam.

Okay.

Thanks very much.

And thanks to Natasha for all of that as well.

I would say.

The real primary points behind resi are it's when you want

something that there's a reason why people say safe as houses, right?

It's pretty boring.

It's pretty vanilla.

It's got a very good, not very volatile track record over time.

Whereas commercial properties, just as you can create an awful lot of value

with structuring the leases correctly, you can also lose an awful lot of value.

And if you go back to COVID times, whereas.

There was no negligible, there was a negligible difference in arrears

compared to a normal year in 2020.

In 2020, we saw commercial properties only collect 50 percent of the

rents, roughly, that they would do.

luckily, commercial landlords tend to be lower geared and have More in

reserve and tend to be bigger companies.

But of course that was a bit of a bit of a surprise.

so you've got the low end of the risk spectrum and in fairness as

well, you've got a higher end of an asset spectrum normally as well.

It's a little bit harder to add that value.

You've got to fight a bit more.

you're normally putting it in through refurbishment and spending

a pound to create one pound 50 or more's worth of value.

As a rule, there are also some tax benefits to doing that if

you're operating within a limited company or in your personal name.

So they're also worth considering, but you've got a market where,

since 1950, you're up nearly 8 percent per year over time.

Some of that is front end loaded so that I'm not suggesting

property resi goes up 7.

7 percent every year from here on in, but it still tends to at least keep pace with.

RPI, which is handy.

And even in the worst of the worst situations where credit is completely

withdrawn, which we saw in 2008, we only saw a drop of about 15 percent in values.

And you can make an argument that some of that is quite false.

So you're looking at a very low downside for a long upside.

It does generally take time in the game to realize that, but one of the old adages,

you make your money on the way in and it's up to you, the strengths of the deals

that you put in and also the amount of time you put in order to get those deals.

it doesn't do badly as a simple, Good old find a 25 percent deposit,

put that down against the property, sit on the property and wait.

Of course, you can do better by being a bit more active and a bit

more creative and putting a bit more time and effort into to what you do.

But you've got an option for pretty safe leverage as well.

you struggle to be.

Sensitively leveraged residential property returns and it does what it shouldn't

really be allowed to do in that the risk generally speaking is quite low and the

returns are quite high, which is not typical for any asset investment class.

It's obviously got quite a bit to do with the fact that it has so much.

In terms of utility, residue property is so useful to people

because apart from anything else, we all need roofs over our heads.

And that sort of leads into the demand versus supply side of things.

There's been a pretty large increase in the UK population over the past

few years for a number of reasons.

And ultimately, the house building is not ramped up.

If anything, it's ramped downwards.

So you've got an awful lot of pressure.

You have had for nearly 10 years now, certainly nine years, on

landlords in the sector who are being taxed more than they were.

Pressure's being put on them to leave the market aside from anything else.

tenant demand is absolutely huge and supply of good quality

rental properties is very low.

Of course, that depends on geography to an extent, but you've got a very safe, you've

got a demographic shift emerging where, although the birth rate is quite low at

the moment in the UK, over the next 10 years, a considerable number more people

will be in the 20 to 30 age bracket.

Thank you Because of people who've already been born and they're moving through the

demographic

curve and they are your typical renters.

Although, of course, you do get renters of all ages.

They're your sort of target market.

So you've got that.

You've got a fairly quick liquidatable value.

there's not many fast buyers.

not as fast as a stock.

I should be clear managed.

But you have got a liquidatable market.

Which operates all the way from 7 days up to 180 days plus, and yet you have

to compromise on sale prices in some of those situations, and you can normally

move properties on through an auction, for example, at sort of 85 plus percent

of their full value, so it gives you an out if you particularly need one,

so it doesn't have to be completely illiquid, although liquidity is always

You've got security in your value because apart from anything else in a vast

way that the UK these days intends to cost much more to build a new property

than to buy one down in the southeast.

Not so true, but you often see these days rebuild values because prices have gone

up so much in terms of construction costs.

Rebuild values are not far away from capital values, even

in more expensive properties.

Parts of the UK.

So it's very difficult to replace that.

It's not for example, if you could build an office block for a couple of million

quid

and get it valued at four million, there isn't necessarily too much stopping

someone else building another office block for two million quid and going

into competition with you in that locale.

Resi doesn't really have that threat to it.

It's very difficult.

For new houses to be built, and that's part of why we've got the

problems

that we've got in the UK around the housing markets.

Apart from anything else, you've got an inflation friendly asset where effectively

taking nominal debt.

You're fixing it a slightly lower rate normally that you pay on commercial

property, slightly better loan to value normally, which can magnify your returns

on equity, which is one of the good ways you can compare asset classes where you've

got to bear risk in mind as well, of course, so some kind of risk adjustment

is a good idea, but it's very favourable, and it has been very favourable in times

like we've had recently, of significant inflation because it's eroded away that

nominal debt, but just like Natasha said in commercial, there's rent progression

over time, especially at the moment, and rent progression has been trending

downwards in percentage terms since about 2005, but has had a massive

resurgence with this wave of inflation we're going through at the moment, so

inflation on side and helping you out with eroding the true value of that

debt away, once that's been considered.

You've also got a significant opportunity at the moment in terms of

the number of people seeking to exit.

apart from anything else, because you've got people who will deal

at prices below market value.

It's not that easy to buy stocks below market value, for example.

And with commercial, as Natasha correctly said, there's different ways to add value.

But there's lots of resi and although you still have to say no to 97, 98

percent of what there are deals out there and they are in reasonable volume.

there's definitely at least a few bargains done at every auction I

ever see on the resi side of things.

And I think, yeah, maybe wouldn't mind having bought that at that sort of price.

Of course, there's a few where you think, I don't know who's paid that price at

the other end of the spectrum as well.

But of course, it takes opinions.

To make a market and make an auction and then the last thing I would say

is there are some really classic tried and tested ways to add value in resi.

For example, two bedroom houses that are quite large being

converted into three beds, adding that extra bedroom that's worked.

For many years and still works today and still will continue working

over the next 20 or 30 years.

So converting the existing rather than building new because of

the costs of all of that can often make quite a lot of sense.

So that's probably me in a nutshell there, Manish.

I think probably about five minutes worth.

obviously I'm a big advocate.

it allows you to use your medicine, residential property

and carry on building a portfolio.

Once you find you can tap into some good sources of deals.

and I think it remains, whilst it's not necessarily the most dynamic

and exciting of asset classes, it does deliver strong head returns.

It's like a well paying bond with a low risk is how I would describe it.

And with the analogy that I would provide.

Great.

Thanks, Adam.

Yeah, look, as usual, a comprehensive kind of range of points from Adam

and compelling points as well.

What did you think, Natasha, any questions, any critiques

of what Adam's just said?

I think, the biggest problem with residential at the moment is

that it is, it's, voting fodder.

a lot of, Aber, Conservatives, you see all, they are going to always try and get

behind whoever they can get votes from, but also they heavily regulate the market.

Does that not worry you going forward as we see more regulation come in

terms of, whilst they haven't done sustainability, they're going to have to

do sustainability at some point and they keep changing, utilities and how we have.

heating, how we run our systems.

Does that not worry you a little bit in terms of, the profits that can be made?

So I think probably the biggest squeeze we've had on our margins is the cost

of debt, apart from anything else.

and I think perversely, although I don't, I take no, no joy in saying this at all,

but every single bit that puts off smaller landlords helps people like me and people

with bigger portfolios because It just affects that supply and demand dynamic

that little bit more and lots of rental stock is so much is still owned by people

who've got one property or two properties.

The vast majority, 80 plus percent of landlords have got

between one and three properties.

those are typically people who've kept a house and bought another one,

or got married later in life and they already had a property and they've

moved in together and things like that.

Those are the people that get pushed out in reality.

And those people can sell those assets into the open market, quite

happily they are ex owner, occupier.

I think if you select your, for example, I've always been a bit of a yield chaser.

Natasha, I'll declare up front.

I know you look at higher yielding commercial property to get some great

double digit returns and things like that.

And that margin of insurance that you've got over and above.

The interest rate, even if there is a cost base associated insulates you quite a lot.

the broader sustainability point, I think, is a good one.

We probably think that the new administration will bring

back in requirements for EPCC and things like that.

I think I've held the same view for a long time and I've seen where the

big institutions are lobbying in this department, they're lobbying for it

being a government funded scheme.

we've been accessing some free graph upgrades for many years.

They come in different forms all the time.

I think some of them are pilot projects that don't necessarily make it through.

we've had 34 properties upgraded in the last 12 months.

with zero cost input, with a whole variety of measures,

all the way from heat pumps to cavity wall insulation and other things like that.

So we've had quite a lot done.

And I think the only way the sector can survive is if

that's funded by the taxpayer.

Unfortunate, though, that might be.

and I think at the moment, anyone with heart for brain will also be saying

to the new administration, if you put more pressure on this sector at this

time, more people are going to leave.

We can already see through the figures that.

The new stock coming through, certainly this using leverage, is very limited.

Only 1 in every 12 at the moment that's being lent on residential

properties being used for buy to let.

Whereas that really needs to be 1 in every six, or seven, or something like that.

And in the boom times, it's 1 in every five that's being lent.

So that is just constricting the supply more and more.

And it comes down to a government having to make, especially with a Labour ideology

behind it, having to make a difficult

Ultimately, what's important to them?

Is it more important that they, that they house, that there's

a supply of rental properties?

Because, the Build to Rent sector has built 100, 000 properties in

basically 10 years, and there's another couple of 100, 000 in the pipeline.

This is not going to make a meaningful difference, and we're so far behind

with the institutional size mindset, and you've got really a sector that's quite

scared of the age of our rental stock.

In the UK, none of these are good things.

They're all structural problems for the UK to solve, but I think that

gives you a lot of insurance in terms of where the cost base is and

where everything else really can go.

And I think probably if they do something silly around EPCs, You're

more likely to make more money from the opportunities of what you'll be able

to buy when people start to dispose of stock than you'll lose on having to.

They're going to have to come from somewhere ultimately in order to,

so will you be able to get interest free loans from the government

if that's what you need to do?

And it'll just get priced into to what's going on in my opinion.

So I don't spend too much time worrying about that because I'm worried

about every rumor they've been over the last sort of 12 or 13 years.

I certainly wouldn't have bought what I've bought, I know.

Probably wouldn't get out of bed in the morning to be a bit

sick, but I understand the point.

Yeah, I like Resi.

I own Resi and, I'm not looking to sell any of my Resi properties.

I just think for me, it's become a lot harder when I look at new

properties out there, it's become a lot harder for things to stack up.

And a lot of that is related to mortgage rates and all the rest of it.

But look, there is no doubt if you go and find the property where you can add value.

you can add the extra room, which Adam mentioned, you can force value into it.

for me, it's gotten, it's got harder because it's become a little bit more

crowded, and certainly in the areas I look and I'm not a prolific property

investor, other people like Adam, but if I was to go out looking for a sort of

vanilla buy to let deal, for yield and for maybe long term capital appreciation.

I'm finding it really hard for things to stack up right now.

And look at, apart from the fact that mortgage rates are high and

your net yields aren't that great, you, people also don't always take

into account taxes and management, fees and, maintenance and legals and

other fees and stamp duty and all the rest of it, which really stacks up.

So you have to really.

So look beyond the headline numbers.

so yeah, I'm finding it really difficult to find things that

stack up on a vanilla basis.

I don't know if you agree, Adam, I don't know if you find the same.

is it just me or do you have to actually put in a lot more work to

get good property deals these days?

I think only a fool or a liar would disagree with that, Manish.

There's no two ways about it.

The interest rate scenario has changed things fairly dramatically.

that's led to this end, either any of the following really, having to do

more creative deals, including payments over time and things like that, and

getting involved with buying limited companies that have got portfolios

in, because landlords are still keen To exit, which again opens a whole

number of creative tools available in the suite to be able to purchase them.

but look at the moment, trying to buy something that's got a 5 percent yield

is extremely difficult unless you've got a large amount of cash to throw at it.

And even if you have, unless you don't use leverage at all, of

course, you're in that position.

That position, but of course your returns are not magnified by the leverage.

So it becomes very difficult.

A large amount of property has become not what I would call investment

grade really at the moment.

So our own volumes in terms of numbers of transactions are down.

But on the flip side, what we're seeing at the moment is we're seeing

vendors more realistic than they've been since before the pandemic.

So you may have to accept that although the cash flow in year

one might not be fantastic.

You've probably got an escalating rent because the way things are around the

rental market at the moment, and you've got a significant amount of equity that's

sitting on paper that, as I say, you could release or liquidate if you saw fit.

So it is playing the long game sometimes, and this will depend, of course,

everybody listening will have their own wants and needs in terms of how much

do you want as cash flow and how much do you want as capital appreciation?

Because in the same way that you would talk about, accumulating

units and income producing units, people can make those decisions.

and at the moment you're being forced more towards taking a longer term view, but.

On that subject, there's a lot of evidence at the moment that the

property is well below its inflation adjusted price over the last 25 years,

and actually looks really cheap.

although I say I'm not expecting property to go up 7.

7 percent a year or whatever for the next 75 years, I think we could

have some years that look like that in the relatively near future.

and if you've got some sensible leverage in there, those returns can

really get quite interesting, I think.

All Okay.

Thanks, Adam.

Really great points.

And Natasha, I don't know if you needed to chip in any further

on, or shall I move on to stocks?

You do stocks.

Okay, perfect.

So over to myself.

So I look, I like stocks, stocks are a core part of my portfolio.

Now they're, if I look at my own asset allocation, they're the

biggest part of my portfolio now.

why?

Because I've been adding to them over the last few years, the

markets have done, really well.

And so overall, they've just grown, they've just grown as

a percentage of my overall.

Okay.

Cool.

so look, stocks are a real investment.

there are people out there who trade and not invest, and they

don't really understand the reality of stock market investing.

So stocks are a real investment.

You legally own a piece of a real company, right?

You're entitled to.

a share of its profits, and dividends.

And it's not speculative at all.

you own companies that make real stuff that people need.

so that's the first thing to say.

secondly, they're passive.

they're completely passive.

They're hands free, set and forget.

and really over the last couple of decades, the whole thing

about, index funds, the growth of index funds, the growth of ETFs.

That's really been a game changer.

And that now allows you to invest in an automatically diversified,

automatically balanced way without really putting in any effort.

it's literally a set and forget.

it's simple to implement.

You don't need to worry about monitoring management, et cetera.

tenants, toilets and boilers.

I often say, there's none of that stuff.

and when you're investing in stocks, you don't need thousands or tens of

thousands or hundreds of thousands.

You can literally start from a hundred pounds.

you can buy single funds, ETF stocks, with virtually no.

Here's, this one's really big for me, because people underestimate

the compounding impact of tax.

So stocks can be very tax efficient.

They're tax free.

when you invest in your ISAs and your pensions, they're, they have an

unrivaled tax advantage in my view.

And you're essentially taking free money, right?

It's not often you get free money from HMRC, but they give you a free top up.

When you, whenever you invest in your pension, contribute to your

pension, you're getting free money on top of what you've invested.

So that is a huge thing for me.

that, proven inflation beating.

Returns over the long term.

They are a compounding machine.

so we're talking about returns of 8 to 12 percent per annum on average nominal.

And, in real terms after inflation, that's 6 to 7, 6 to 8 percent in real terms.

And that's not just recently.

That's over the last.

150 years.

Okay.

So we've got long term, just like property, we have a long term track record

of proven inflation beating, returns.

and actually over the last 10 years, 10, 15 years, since the financial

crisis, we've had more like 14, 15 percent per annum, in growth.

So that's really attractive.

The returns have been great.

of course.

Markets decline.

they always do.

And for me, that's an opportunity.

I rub my hands and glee whenever markets decline because I'm pound

cost averaging all the time.

That allows me to buy more shares, more units, of what I like anyway.

So you get the opportunity to buy things when they're on sale.

There's never been a permanent loss, right?

if you look back over the history of stock market history, there's

been all sorts of things going on.

But there's never ever been a permanent loss, especially if

you invest in a diversified way.

Markets always recover.

And we know that by looking at, 150 years plus of history.

So we've been through wars, been through famines, pandemics, crisis

after crisis, existential threats like World War I, World War II, right?

And markets have always come through it.

And we're talking real terms have come through it.

Have continued to make new highs, stocks are liquid.

You can buy something today and sell it tomorrow and get your money the day after.

and here's another big thing for me.

So not many people are aware that, yeah, stocks, are a really

rich source of recurring income.

So we're talking dividends, you can, you can get really decent levels

of income, through certain blue chip, high quality blue chip stocks.

So we're talking dividends, 4, 6, 7 percent per annum on some stocks.

Of course, you have to be selective.

you can also get income through REITs.

REITs, Real Estate Investment Trust.

So investing in property through the stock markets.

Again, you have to be selective because they're not all great.

So you have to do your due diligence, but we're talking income levels of.

three, four, five, up to 8 percent per annum.

And the final thing is, which I do a lot of my investors invest in options,

alongside our stock portfolio, so options give you an opportunity

to earn 1 3 percent per month.

Yep, per month.

and this is, options, a lot of people feel they're high risk, but they're

actually a safer way to invest.

In stocks and actually doing it the conventional way.

those are my, my, my points.

and the final thing I would say is I think stocks are the only

asset class out there where you virtually keep everything you made.

If you do it properly, if you're not paying away too much in fees.

you can keep, most of your gains and there's no taxes if done properly.

There's no high management fees if done properly.

There's no maintenance, there's no legal fees, et cetera, et cetera.

So if you do it in the right wrappers, in the right setup, you

basically keep everything you make.

so yeah, that's my case on stocks and happy to hear

questions, critiques, et cetera.

The one thing I would say about stocks is.

They always seem so confusing to get into and I think that's a barrier to

entry for most people is that it sounds great And you know all these rich

people and people who make a lot of money have stocks and shares accounts

For the person just starting out that's really confusing and that would

probably it should be taught at school Honestly, it should be taught at school.

I'm a firm believer in that But that's where I think that stocks and shares

falls down because it is easy to get into if you have 50 pounds, 100 pounds,

great, but where do you even start?

How do you know where to start?

everybody tells you the best time to invest was when you were 16, 17, 18.

Okay, but where, how, why?

whereas property is something that you're always expected to

get into, especially residential.

That's why people get into residential.

It's easy.

We know Exactly, really the ropes.

And you know that if you haven't done it before, there's plenty of people

around who can pull you through it.

Whereas stocks and shares, you go on the internet, and you find the

stocks and shares accounts, and sometimes they look dodgy as hell.

That would be my critique of it.

What would you say?

I think, look, it's a fair point.

And a lot of what you've said is almost deliberately created by the

financial industry because what, they want things to sound complicated.

So what do you do?

You invest through them, you pay them fees, right?

and it's not, the great thing about stocks, you don't need to be rich,

you don't need to have experience.

You don't need to have any expertise.

They are one of the simplest ways to

invest.

it's just that people, you know, they don't appreciate that.

And it's a fair point, Natasha.

and I'm trying to do my bit to make people aware that actually they're super simple.

and actually the people, amongst my investors, the people who,

achieve the best returns in options, for example, they've only been

doing it for a year, two years.

I've been doing this for 20 years.

I'm a little bit more conservative.

But people, there is no barrier to entry in terms of performing well,

just because you have more experience.

I think the key thing is what you've said is you just need to get over this

sort of the perception of complexity, because it's not as complex as most

people think, but it's a fair point.

Adam, did you have anything?

I think I would probably just highlight, firstly, the volatility as it can be

in the shorter term, especially with.

trading things like options.

So you do need to have the right sort of disposition and you do have to, as

you've alluded to there, be able to have the potential to get quite a bit higher

returns because of that volatility.

not everyone is suited to that, of course, and people need to be

honest with themselves about their risk profiles and things like that.

Of course, they do.

And I also thought you'd need a bit cheeky to appropriate the ISA for a pension.

As only being in this stocks and shares category, because we did already talk

about commercial, via SIPs and SAPs, and of course you have got things

like the, the IFISs and things like that, the intelligent finance ones,

that do enable you to do all sorts.

And there are also ways, by both, genuinely diverse commercial

vehicles to invest SAS money in Resi.

And of course, if you've got companies you can do loan backs to, then you

can loan back and use funds for Resi, although you can't use a hundred

percent of your pension fund for that.

And you can't use your ISA funds for that.

I'm a big advocate.

the tax shields that you've outlined there, absolutely.

I think everybody should use them.

But also, I'm acutely aware that they've also got a C link.

once you've gone past your, once you've gone up to your ISO thresholds or

your pension contribution thresholds or whatever, there is an element

of what then, and how do you do it?

And I think

that

the strength of probably, All three of the things that we've all discussed

today is also that a lot of the tax gets deferred and is only crystallized,

assuming the tax is in the capital gain on stock rather than the dividend.

Of course, there's a bit of both.

The same goes for resi and commercial.

There's going to be tax on capital gain.

On, on the rents that come in, one way or another, depending on the vehicle

in which you're holding them in.

But some of the big gains can at least be deferred until the sale of the asset,

which helps you compound and gives us all, an advantage over certain other things

that are out there in the market, in the investing, big investing wide world.

And to be fair to you as well, I think.

Natasha raised a good point, but let's face it, Natasha, there's sharks

swimming in all of our respective waters, we've all got to be careful

about what we look up on the internet about commercial property, residential

property, or stocks and shares, I think that point probably is fairly

level to all three of us, to be honest.

Yeah, that's a great point.

And, yeah, worth mentioning.

Absolutely.

So people need to I think the key thing there really is, don't fall for

everything and investors, our shortcut as human beings is to see what other

people are doing and saying, and we almost, fall for the marketing sometimes.

So I think Adam's raised is make sure you do your own due diligence,

know your own risk profiles, know what you want to achieve.

and take it from there.

don't buy other people's products just because they make you a good job in terms

of marketing it, know what you want first.

I think that's the key thing.

So look, we've heard some great arguments from everyone.

I've really enjoyed it.

I've learned a few things here and it's been great.

and personally I own all three asset classes and I know both

Adam and Natasha own all three.

So we were partially being devil's advocate here.

but, I think that works well.

I think the key thing for me is, diversification is key, and when

you diversify, you mitigate asset specific risks from all three.

So the real, the key question is not necessarily.

It's really what portion of your portfolio to allocate to each one,

given your personal risk profiles, given what your personal objectives

are and also where your expertise is.

and how much time and effort you want to put into it.

so I would say, take a look at your own portfolio.

and if you're too heavy or dominant in one, maybe think about diversifying,

think about what you want to achieve and take it from there.

But I think there's merits in.

All three asset classes we've mentioned today.

I don't know if you guys have any sort of concluding remarks

Before we wrap it up for today.

I'd agree with your sentiments I've taken the viewpoint that I buy commercial

and only little commercial property.

So for example, I bought a telephone box and I rent it out as retail and that

money then goes into stocks and shares.

So constantly compounding the income that's coming in.

And so I spread my risk based upon do I expect at the moment to get

a huge amount out of my pension?

no, it's years off and years off.

And I've protected that through my other assets as well.

So I can have a little bit more fun with that, but other people

aren't going to be able to.

So it's making that decision as to where am I happy to take that higher risk?

And where am I happy to actually, I want low risk.

I just want that money coming in and compounding for me.

If you make those decisions, then that means that you have got a portfolio.

But ultimately, one thing isn't doing quite so well, another thing will

be doing quite so well, and that's all about balancing your portfolio.

Absolutely, the magic of diversification, right?

Adam, anything to add to that or very much endorse what you've both just said,

and I would just probably reiterate the point slightly as well that, yes,

it is very much about diversification.

And it's also about your answers to the marshmallow test or,

jam today or jam tomorrow.

You're also going to balance income producing and capital growth.

on one side of the fence than the other.

So you can achieve that through your diversification as well.

It's all very well deferring everything, but if you defer everything you can't

eat tomorrow if you're, if you're not bringing in another source of income.

So it's balancing your time,

balancing

your risk.

Balancing all of that.

Balancing your effort, ultimately.

That's what true diversification and true balance really looks like.

And I think that's what everybody should be striving towards.

And I'm not there yet, but I'm certainly still striving towards it every day.

But I think I very much agree with what you both said as well.

Great summary.

Yeah.

Great points.

Great points.

again, I just want to say thank you guys.

I know your weeks, your week was, your schedules were really busy.

and I feel privileged to have had both of you on this today.

Lots of value for our listeners and our viewers.

So again, thanks very much.

where can people find you guys, Adam, if people want to follow you,

find you, how can they find you?

Yes, so Adam Lawrence on LinkedIn.

Drop me a follow on there and as you already kindly alluded to my newsletter

that comes out on a Sunday in my Sunday supplement, also on YouTube.

So my channel is called Proponomics with Adam Lawrence.

So property and economics mashed together.

there's a few hundred videos on there now.

some evergreen ones and some sort of, some newsworthy ones as well.

So well worth a look and drop me a subscribe on YouTube as well.

That'd be great.

Great.

And Natasha, where can people find you?

you can head to my website ncrealestate.

co.

uk.

You can follow me on Instagram, which is at ncrealestateLTD, or you

can listen to my podcast, the Honest Property Investment Podcast, or

email me, Natasha at ncrealestate.

co.

uk.

Fantastic.

And guys, if you, enjoyed today, if you found value, please do and

subscribe and follow the podcast.

Until next time, see you later.