Noel Whittaker is the author of Wills, Death & Taxes Made Simple and numerous other books on personal finance. Email: [email protected]​

I must confess, it has been a challenging time for share investors, with prices falling across the board – both here and overseas – as tariffs and the war in the Ukraine dominate the news. But as unsettling as it may be, we need to accept that volatility is the price we pay for the liquidity of shares.

Keep in mind that over the past 120 years, the Australian All Ordinaries Index has delivered an average return of around 9% per year, including both income and growth. There are good years and bad years, but history tells us that markets tend to produce six strong years and four weaker ones in every decade. The secret is to hang in there.

Warren Buffett often uses a farm analogy to explain how investors should approach stock market volatility. ‘If you owned a farm and your neighbour came by every day offering to buy it at wildly different prices, you wouldn’t sell it cheap just because he was in a bad mood, nor would you think it’s worth a fortune just because he’s overly excited one day.’

Just this week, a reader wrote to me, asking why I always seem to be writing about how good shares are and never mention investment property. In her view, shares are risky, whereas investment property provides a very stable portfolio. I can understand her thinking, but while it’s less volatile, in many ways, property is a far more challenging investment than shares.

Would you prefer to invest in property or shares? Image Credit: Shutterstock

The key to success in property is buying an asset to which you can add value – typically through renovation or rezoning. And to maximise returns, you need to secure it at a below-market price.

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[MariaG]

I have a very small shareholding, given to me as a freebie when the company went public. It has paid dividends far better than interest on deposits. The clinch is that the share market is not set in stone and anything can happen. That's why I choose not to join the speculators.

We had investment properties over the years. They got us to the point of having a home without a loan and a reasonable nest egg. It was important for us to have set goals. We never bought just to own something. We bought, rented out or leased then when the market was good, sold and moved on to the next property. We had private and commercial rentals. Both had their own benefits.

Ultimately, our choice to go with properties worked very much in our favour. Today, it is more about having the financial means to invest in prime locations.

Whichever way one chooses, it is best not to rush in without doing thorough research.