The Pros And Cons Of Investing In Real Estate Vs Stock | Investing

Choosing the perfect investment avenue for yourself can be a strenuous experience, if you are not aware of the various options available. According to most investment experts, real estate and stocks are the best bet, when looking for a new investment. While both have their advantages, you cannot overlook the negative aspects as well. Here is a comparative analysis of property investments and stock investments-Real EstateThe Benefits1. Middle-Class FriendlyReal estate includes houses, apartments, hospitals, and other tangible things that middle-income and even lower- income groups are familiar with. This is in stark contrast to stocks, as the general population knows minimal about the latter. Hence, they prefer investing in property over stocks.2. Safer Investment


Compared to stocks, which have a higher risk factor involved, property investments are relatively safer. While both real estate markets and stock markets are quite turbulent, the former has a bigger safety net. The reason being that with property investments, not much is left to chance.The Drawbacks1. More Research InvolvedStock investments are pretty straight forward and don’t require excessive research on the investor’s part. However, real estate investments involve a lot of hard work. From deciding on the property type to finalising on the mode of payment, there are a lot of tough calls to make.2. Eligible For Tax PaymentProperty investments are eligible for tax payments, which is not the case with stock investments. So, unless you rent out your property, you will stand to lose due to tax payments.StocksThe Benefits1. Greater ProfitsMost market analysts have agreed that stocks provide more profits as compared to property investments. Also, holding a stock for a long period of time has been one of the greatest wealth creators that puts stocks ahead of real estate in terms of the profit earning capacity.2. Easier To DiversifyWhen you invest in the real estate market, you can only choose one property type at a time. This is not the case with the stock market, due to the availability of mutual funds. Mutual fund is a type of professionally managed investment fund that pools money from many investors to purchase securities. This gives investors a wide basket of stocks to invest in.


The Drawbacks1. Ever Changing Price TrendsThe biggest challenge for stock investments is that the stock exchange is fickle, as there is no telling when stock prices may soar or fall. While there are constant changes in the property market as well, the effects of the change are not as substantial.2. Psychological FactorStock investments share some attributes with gambling. Like gambling, stocks investment also invites investors to invest more money with every gain that they make. Inevitably, this can be psychologically unhealthy.Deciding on the type of investment depends upon a lot of factors. So, before investing your money, you must measure the advantages and disadvantages of real estate and stocks very carefully.

Control the Investment Market | Investing

The act of investment is at its cornerstone, gambling. I might add so is life! We make choices, whether to smoke or not, engage in dangerous sports, gamble on marriage, even choosing friends. Investing for gain, is a parallel. A best guess of the future. What criterion should we use to tip the scales in our favor?The people are important! The issuers or advisors of the offering, as well as the management personnel of the business we are investing in. Usually, we are advised by a person we went to school with, maybe a trusted family friend or contact we have known who is reliable. In this “new investment” market we are somewhat vulnerable. With internet and high-speed communication opportunities are here now, but gone tomorrow, the pace is frightening. The new investment market is world-wide, making investment friends needs be almost a “warlike” exercise. We have to make fast friends to survive, and prosper. When everybody says “do it now”, instead slow down! Make your first determination based on the people involved. No right-minded advisor should assume you are going to invest immediately. I would like you to have conversations, see some correspondence, understand the mindset and goals, before investing.


Understand the investment. Do not take assurances from those who proposed to be competent. Make sure you understand. Ask questions specifically and repeatedly. Will all questions be answered affirmatively? Probably not. There are certain generic risks, both in time frame and yield spread, everyone in an investment should be conscience of. Inability to satisfy questions will not necessarily dis-qualify the investment opportunity. Personal determination, sometimes a forgotten item these days, will benefit you.Controlling your investments means knowing your investment pace. How long is your investment time frame? Are we seeking the long-term accrual retirement income or short-term monthly income stream? Anything over 10 years is long-term investment. We should be conscience of interest rate variables, time vs. money decay should be adjusted and thought out. As we sort out our personal investment agenda, we turn our thought to the prospects which we can invest in. Not all good or great investments are suitable to each investor. If you have college tuition to be prepared for in two years, a five-year investment overlapping this event will not be advantageous. I would not assume I could borrow or sell this investment on suitable terms to accomplish this. With work, wide variety of investments can mitigate these issues. This can be long-term growth stocks, bonds, short-term equities, or C.D.’s, or whatever tickles your fancy. Unfortunately, investing in the right securities is just like work, It might be tedious. Your money will go out and reproduce itself, but it will need guidance from you!