Real Estate vs the Stock Market

In the 80’s I was a stock broker then after a few turns in the road, I became a mortgage broker. Still the age-old debate: is the stock market or real estate a better investment? Other than the usual discussion about liquidity vs non-liquidity there is a clear winner.

When there’s volatility in the housing market everyone seems to jump all over it. When there’s volatility in the stock market, there’s some people saying you should never buy stocks again. Stocks were never a good investment, they’d say. Some people feel that way about real estate now.

What I learned as a stock broker, never try for the ultimate bottom or top – it’s a losers game. Buy when a good stock is low and if it’s quality, it will go up. So what if it falls a bit first. If you wait, you might miss the move altogether. 

Well let’s take a look. We go all the way back to January 2000. And the most amazing thing with this is real estate has gone up over six times more than the Dow. S&P 500 and NASDAQ are still in the negative from January 1, 2000. But the Dow, which is in the positive, real estate out performed it by over six times.

If you think the past ten or eleven years are unusual, pick another decade. You’ll find similar percentages.

If it were me, I’d own both.

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