GENERALLY WHICH INVESTMENT CAN GIVE YOU MORE PROFIT.STOCKS OR REAL ESTATE?

Stocks or Real Estate? Why?

{ 3 comments… read them below or add one }

John H July 23, 2010 at 7:17 am

Hi, Light Blue!

I’m glad you have the sense to ask this question.

It never fails to surprise me how many people are attracted to stock investments when Real Estate is clearly a better investment in most cases.

Real Estate (if properly managed) is a relatively low risk, high yield type of long term investment.

Stock Investments can pay off in the long term but generally not to the degree that Real Estate can.

The main question is whether or not you have enough to invest and can afford (or figure out a way to finance) the long term holding costs.

The future value in Real Estate is based in Equity.

Stock value is consumer based (who’s buying what and when).

Every circumstance is different and sometimes the intuitive understanding that Real Estate generally goes ‘up and up’ and Stocks generally fluctuate doesn’t always apply.

I don’t know your particular circumstance but I would suggest you seek out an independent financial adviser before making any decisions as to which way to invest.

A combination of investment types may be a good way to go also.

The financial adviser should be fee based and not have a vested interest in the outcome.

Do not discuss stock investments with a stock broker (they want their commission).

Do not discuss Real Estate investments with a Realtor (they want their commission).

Take your time, do your research, don’t let anyone pressure you into making swift decisions.

Time is your friend and patience is a virtue.

Hope this helps.

John H

nronronronro July 23, 2010 at 8:16 am

In the period 1850 to 2009, U.S. stocks returned 10.2% per annum and U.S. real estate returned 5.8% per annum.

Put another way, the average house cost $2,000 in 1850 and is worth $200,000 today. That is a 100x increase.

Over the same period, stocks increased more than 1000x.

But on the other hand, stocks are more volatile than real estate.

Good luck!
Ron

Souvik July 23, 2010 at 8:38 am

Obviously stocks.

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