I had a conversation over the backyard fence yesterday with a neighbour kicking himself for not buying 4 or 5 blocks along our street when the price was only A$50K each. Three years later each block is now in high demand and could easily command A$200K+.

How easy it is to talk about what might have been. The only problem is that hindsight is just that - seeing behind. It's a great teacher because we can learn from what has happened in the past, analyse and extrapolate patterns and trends that can help us invest in the future. But as an investor, hindsight can fool us into thinking that what happened once will definitely happen again. If you think this is a wise investment strategy then I would refer you to the disclaimer found on every managed fund prospectus, "Past performance does not indicate future performance".

My neighbour rues his lack of investment nouse three years ago when now it appears that one could have taken a huge risk and it would have paid off. If he was so savvy with financial hindsight then I question why he hasn't already purchased those 4-5 blocks at their current price for surely they will be at least A$800K+ by 2009!

That's just the point. If we had all knowledge and could eliminate risk from every investment then it would be pure sailing. However, everyone else in the market would have the same knowledge and lack of risk also meaning that the investment would be rendered useless.

To my neighbour I would say, "Stop talking about what might have been. Learn from the past and look for investments that are possible for your own risk levels. Christmas only comes but once per year. The other 364 days we need to live out what doesn't make news headlines."