6 Reasons Property Investors Give for Not Investing in Shares — And an Honest Response to Each

If you've spent the last decade building wealth through property, you have probably said at least one of the following things about shares:

"Shares can go to zero."
"The GFC proved how risky they are."
"I can't see shares. They're not real."
"Banks won't lend me money to buy shares."
"I don't know enough about companies to invest in them."
"Property has made me wealthy — why change what works?"

None of these is a stupid objection. Each reflects a genuine concern or a genuine experience. And each deserves a genuine response — not a dismissal, not a lecture, but an honest answer.

Here they are.

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Objection 1: "Shares can go to zero."

What's true in this objection: Individual company shares can go to zero. Ansett. HIH Insurance. ABC Learning Centres. Retail investors who held shares in these companies through bankruptcy lost everything. The risk is real.

The honest response: A single share can go to zero. A diversified ETF holding 200 Australian companies cannot go to zero unless every company in Australia simultaneously goes bankrupt — which has never happened and would require a collapse of civilisation, not just financial markets.

The distinction between a single company and a diversified fund is the most important one in share investing. When property investors say "shares can go to zero," they are typically thinking of individual stocks. GHHF — which holds approximately 8,000 companies across Australia, the US, Europe, Japan, and emerging markets — cannot go to zero for the same reason your suburb cannot simultaneously lose all value while every other suburb in Australia is fine. The diversification is the protection.

A geared ETF can lose 40–50% in a severe market decline. That is not zero. And it is recoverable over time with a long-term horizon.

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Objection 2: "The GFC proved how risky shares are."

What's true in this objection: The ASX 200 fell 54% from peak to trough during the GFC. People who invested their retirement savings in shares in 2007 watched them halve. That experience was genuinely traumatic and influenced a generation of investors.

The honest response: The GFC proved that leveraged individual stock positions in a panic can produce catastrophic outcomes. It did not prove that long-term diversified investing is dangerous.

The investors who were destroyed in the GFC were holding concentrated, highly leveraged positions — often in financial stocks. The investors who held diversified portfolios and didn't sell recovered fully within 3–5 years (including dividends reinvested).

Notably, property investors tend not to apply the same standard to their own asset class. Australian property fell 10–20% in some markets in 2008–2009. You didn't notice because there was no daily ticker. In 2022, Australian property fell 8.5% nationally — one of the fastest declines in decades. Property investors held through it. The lesson was the same: hold through downturns and recover.

The risk of shares is real. The risk of property is also real. The GFC is not evidence that shares are uniquely dangerous — it is evidence that short-term leveraged positions in any asset class are dangerous.

See: The GFC made Australians scared of shares. Here's why a geared ETF is different.

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Objection 3: "I can't see or touch shares. Property feels real."

What's true in this objection: Property is tangible. You can drive past your investment. You can see what condition it's in. You have a physical understanding of what you own. Shares are numbers on a screen.

The honest response: The tangibility of property is real — and it has a genuine psychological value that shouldn't be dismissed. Some people genuinely make better investment decisions when they have a physical anchor for the asset they own.

But there are two things tangibility is not:

1. It is not a financial protection. A house that is physically real can still fall in value, suffer uninsured damage, face strata complications, or sit vacant. Tangibility does not reduce financial risk.
2. It is not the same as understanding what you own. When you buy GHHF, you own a proportional interest in approximately 8,000 companies including Apple, Microsoft, BHP, CBA, CSL, and Nestlé. These are real businesses generating real revenue, producing real goods and services for real customers. The fact that ownership is expressed as fund units rather than a land title doesn't make it less real.

The discomfort with intangibility is a psychological adjustment, not a financial judgement. Most investors who have held ETFs for more than two years report that the abstract feeling dissipates as they see their portfolio grow.

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Objection 4: "Banks won't lend me money to buy shares the way they lend for property."

What's true in this objection: Australian banks will not lend 80% of an ASX portfolio at mortgage rates. That structural advantage of property over shares was real and significant.

The honest response: This was true until recently. It is now less true.

Three products provide leverage on share investments in Australia today:

• Geared ETFs (G200, GHHF): 30–40% effective LVR, no application, no margin calls, from $500. The fund borrows at institutional rates — you don't apply for the loan.
• NAB Equity Builder: Up to 75% LVR, P&I repayments, no margin calls, minimum $20,000. This is a formal loan application — structurally similar to a mortgage.
• Margin loans: Up to 70% LVR, 9–10% p.a. interest, margin calls. Available from CommSec, Bell Direct, and other brokers.

None of these matches property's 80% LVR. But the gap has narrowed significantly. And the 2026 budget reduced the practical benefit of property's higher LVR by removing the annual negative gearing cash flow benefit for new established purchases.

See: How to get leverage on shares without a mortgage

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Objection 5: "I don't know enough about companies to invest in shares."

What's true in this objection: Picking individual stocks requires research, financial literacy, and a tolerance for concentrated risk. Most people don't have the time, skills, or interest for this. And even professional fund managers, with teams of analysts, consistently underperform simple index funds.

The honest response: This objection perfectly describes why index ETFs exist.

You do not need to know anything about individual companies to buy DHHF, GHHF, VAS, or VGS. These funds are designed for investors who don't want to pick stocks. The fund's composition is determined by market capitalisation — the market collectively decides what's in it, and you buy a proportional slice of those decisions.

Buying an index ETF does not require you to understand the business model of every company in it. It requires you to understand one thing: that over long periods, the combined returns of hundreds or thousands of companies have historically trended upward.

Property investors don't need to understand the economics of each suburb's infrastructure planning, demographic trends, or zoning regulations to make money from property. They trust the broad direction of the market and hold for the long term. Index ETF investing is the same approach applied to a different asset.

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Objection 6: "Property has made me wealthy — why change what works?"

What's true in this objection: If you have built significant wealth through property, your strategy has worked. The decision you made, the commitment you showed, and the leverage you used — all of those were correct. You have the results to prove it.

The honest response: No one is suggesting you were wrong. You were right. And you should keep what's working.

The question is not about the past — it's about the next dollar.

Your existing properties are grandfathered. They are working. Hold them.

The question is whether your next $50,000 or $100,000 of investable capital should go into a new established property purchase (with quarantined negative gearing, reduced serviceability, and the same management overhead) or into a geared ETF (with no stamp duty, no management, and conditions that are now relatively more favourable than at any point in the last 30 years).

"What worked before" is a valid input into that decision. It is not the whole decision.

The conditions have changed — partially. Your instinct about leverage was always correct. The optimal vehicle for new capital, post-2026, has changed — somewhat. Recognising that is not abandoning a strategy that worked. It is updating it.

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Frequently asked questions

Is property investing safer than shares in Australia?

Neither is uniformly safer — they carry different types of risk. Property has lower visible volatility (no daily price ticker) but carries concentration risk (single asset, single location), liquidity risk (cannot be sold quickly), and operational risk (tenants, maintenance, vacancy). Shares are more volatile on a daily basis but offer diversification across hundreds or thousands of companies, full liquidity, and no operational overhead. For long-term investors who hold through volatility, both have delivered strong returns historically.

Can a diversified ETF really not go to zero?

A diversified ETF tracking hundreds of companies (like VAS covering 300 Australian companies or GHHF covering approximately 8,000 global companies) cannot go to zero unless all of those companies simultaneously become worthless. This would require a complete collapse of the global economy — a scenario far more catastrophic than any historical market crash. The maximum realistic loss on a diversified index ETF in a severe bear market has historically been 50–60% from peak (as in the GFC), followed by full recovery within 3–7 years.

What is the difference between investing in individual stocks and index ETFs?

An individual stock is ownership in one company. If that company fails, you can lose your entire investment. An index ETF holds hundreds or thousands of companies. If any individual company fails, it is a small component of the total portfolio and has minimal impact on overall value. Index ETFs are specifically designed to eliminate the single-company risk that causes the "shares can go to zero" fear. The risk that remains is market-wide systematic risk — which has always recovered historically — rather than individual company risk.

Do shares require active management?

Index ETFs require minimal active management. You buy, you hold, you reinvest distributions (or use a fund that does it automatically), and you review once or twice a year. This is substantially less time-intensive than property management, which requires ongoing decisions about maintenance, tenants, lease renewals, and property condition. The common perception that shares require constant attention reflects experience with individual stock picking — not with simple index ETF investing.

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This article is for general information only and does not constitute financial, tax or legal advice. Individual circumstances vary. Consult a registered tax agent or licensed financial adviser before making decisions based on this information.