Invest in Real Estate or Stocks???

[Priixy]

I have some amount of earnings apart from the ones that I save for my necessities. I want the earnings invested in some real estate or may be in stocks. I do have some knowledge on stocks but, earlier my cousin had invested in the stocks and had a set-back. I know that you need to be updated in that but – What is a better option from the two???

[paul]

Both are good to buy while prices are falling! However in most of the cases in real estate market there are more limitation, like you can't find buyers easily as and when you want to sell your property, buyers are limited within a radius of your city or town. In case if you want to invest in share market you should have deep knowledge about the market and should know well what to buy and "when" to buy? In real estate you should know when to buy? what to buy? and most important thing you should also know "where" to buy? In my personal view a multidimensional investing is good like you should invest in mutual fund, insurance and other financial sector that yield good returns and are secured.

[DPS Computing]

Find yourself a company like Yahoo! or Microsoft in the early days while shares are dirt cheap and you'll definitely think stocks is the best option!

[Bernard]

Hi there,

Three interesting nuggets on this one. One, is that the typical nature of speculative markets like real estate and stocks is that when everybody is talking about one market as the “safe” investment relative to another, that is usually a bearish indicator that all of the optimism has been priced into the market. Or put another way, when everyone is talking about real estate, it is time to buy stocks. When everyone is talking about stocks, it is time to buy real estate.

Two is that when people talk about risk factors, it is important to talk apples to apples. There is a big difference between the investor who is buying stocks for all cash versus on margin (leveraged). One can invest and hold. The other is in deep doo-doo if the market turns. Similarly, there is a big difference between buying a primary residence based on payments you can afford versus investment real estate that you assume will gain in value or will realize rental income appreciation. Again, one can buy and hold, whereas the other is in deep doo-doo if the market turns.

Three is that the typical analysis that I have seen play out in both real estate and stock speculation is that the investor who is sitting with great paper gains, has a meme that plays in their head that says, “Well if things turn and I lose 20-30% of my value, I am unhappy but not sunk.” They don’t unfortunately play bubble scenarios where 60% of total portfolio value evaporates and figure out what that means for them in terms of cash flow. Having been in real estate professionally during the SEC crisis and seeing many, many sophisticated developers lose everything, and having been a tech entrepreneur in the bubble and seen mostly paper (but no less painful) doomsday outcomes play out, I would STRONGLY encourage all investors to add such a scenario to their thinking as those outcomes really suck big time. A level set on income producing real estate investing is that typical market rents only account for roughly 50 cents on the dollar of what acquisition values are going for so the market is disproportionately pricing appreciation into the equation. Appreciation goes down, supply sits and then increases in a market where rents are generally fairly soft

[eUKhost.com]

Intelligent spammers. :)

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[DPS Computing]

Intelligent spammers. :)

:spam:

Indeed ;).