Okay, you win. The stock market is better. - Posted by Stacy (AZ)
Posted by Stacy (AZ) on December 21, 1999 at 15:21:19:
I had a conversation with a friend today who invests exclusively in the stock market. We’ve had heated debates in the past about real estate investing versus stocks. I usually hand him all the" theory" I know about the inherent risks in stock market investing, and we usually end up at logger-heads, each convinced the other is wrong.
It’s not that I think putting all your eggs in one basket is a good idea. Diversifications is a wise strategy. However, my ideas of how much to “emphisize” stock investing in anyone’s portfolio are much different than his. He invests exclusively in stocks, and mainly for the long term. I currently invest almost exclusively in real estate, mainly for the short term.
Today he told me about how his past year of stock investing has gone. It has done extremely well. Most of his stocks are in self-directed IRAs, so his tax bite is very small, now. Anyway, after hearing about the phenomenal year he’s had, and comparing it to my year, I feel a little like the wind has gone out of my sails.
I’ve spent countless hours researching properties, speaking to title people, realtors, buyers, sellers, appraisers, loan reps, performing due diligence, driving all over town…all the things RE investors must do (while also working full-time), and have made a pretty fair return. He, on the other hand, reads the newpaper, listens to business news reports, and buys stocks on the internet. And he made three times the return I did. I know the theory. But these are the hard facts. I have other friends that are doing very well in the stock market; his case is not all that special.
It makes me wonder; Am I in the wrong game?
Certainly is food for thought.