Is a Real Estate Investment Better than Stocks?
Investing your hard-earned money is one of the best things you can do for yourself and for your future. With the overwhelming number of investment options to choose from, how will you know which one suits you best? Is a real estate investment better than investing in the stock market?
Surprisingly, figures show that investing in the stock market is still better than investing in the real estate market. According to Realtor.com, stocks offer an 11.8 percent return over a period of three years and 1.8 percent in one year.
"Over time, your investment [in stock] will produce good returns, but you need to be in it for a long frame," said NerdWallet investing expert Arielle O'Shea.
Investing in stocks is a great option for those who can do it in the long run as returns will not be easily seen in a matter of months or a couple of years.
"If you're going to panic when the market goes down, or if you need your money soon, it's probably not a good investment for you," she added.
People are always encouraged to have a diversified portfolio if they decide to invest in stocks and find well-performing funds rather than invest in individual companies.
As with the case of real estate investment, the publication notes that this kind of investment has a 6.8 percent annualized return in three years as of February 2016 and 4.4 percent return in one year. As a matter of fact, the majority of consumers in the U.S. account 46 percent of their investable assets in real estate.
As previously reported here on Realty Today, investing in the real estate is a great option for those who are looking to save money for their retirement. Having an additional real estate aside from your primary residence will also help add passive income to your monthly budget if you decide to rent the property to someone else.