*As far as real estate, I
have owned virtually every kind available, i.e.
single family, apartments, raw land, commercial, you
name it. *I have never lost a dime in over 30 years of
real estate investing. *So........................if it's between
real estate and common stock, I would not have a
problem deciding. *
This discussion has morphed into a continuation of the discussion of "real estate as an investment" (which is OK!)
A couple of financial facts:
1. For anybody with more than a few thousand dollars to invest, investing is not an "either/or" proposition. It is both practical (through mutual funds) and desirable (because of the principle of low correlation of annual total returns) to simultaneously invest in numerous categories of assets.
2. Owning real estate directly is a combination of a "job" and an investment. The time spent managing the property should enhance the rate of return on the investment, but has an "imputed cost," which, if valued at, say, $25 per hour, will substantially reduce the apparent return on the invested equity.
For most people who don't want to become "real estate enterpreneurs," the best approach is to include REITs in their investment portfolio. Over the past 15 years, REITs have had about the same cumulative total return as U.S. stocks, with virtually zero correlation in annual total returns. That is a strong argument for owning some of each.