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Opinion: Stocks Are a Better Bet Than Real Estate in 2020

Expertise: Real Estate Investing Basics, Personal Development, Landlording & Rental Properties, Real Estate News & Commentary, Business Management, Flipping Houses, Real Estate Deal Analysis & Advice, Personal Finance, Real Estate Marketing
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From a financial standpoint, though times are challenging, you need to exploit the current situation to the best of your ability. As much as I feel the word “exploit” is somewhat disingenuous, in my opinion, it is exactly what you need to be doing right now.

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For those of you who know me, know my heart and soul are pure, but we live in a world where if you don’t eat, someone else will eat you. And I don’t want that to happen to you. While others contract, you expand. While others are fearful, you get greedy. While others do nothing, you double down on everything.

I was fortunate enough to have somewhat predicted this $#%@ show that we are experiencing in the world right now. Not from a pandemic standpoint, but more so from an economic standpoint. With that being said, I’m pretty good at talking myself out of business for the benefit of others and have done so for the last seven years when it comes to my turnkey company.

So, I might as well do it again.

Female hand with smartphone trading stock online in coffee shop , Business concept

What About Real Estate?

I know we all love real estate because it's a safe haven. Real estate is an asset that you can touch, see, and feel, and it makes sense in so many ways. But for those who can swallow the swings of the stock market, it is my opinion that you should be investing in stocks right now, not necessarily real estate.

You can buy established companies at a 50% discount or more! Some have good earnings growth, pay consistent dividends, and have very healthy balance sheets.

But then again, what do I know? I’m not a stock guy. I’m a real estate guy, so take my advice with a grain of salt.

Related: Why Real Estate Beats Stocks During a Recession

Why You Should Invest in Stocks Right Now

Still, here is my simple thought process—and maybe you’ll agree.

  1. Stocks go to $#@% first, then the economy, and lastly real estate.
  2. There are opportunities like this only once every 10 years or so, where amateurs like you and me can do really well investing in stocks no matter what stocks we pick (as long as they are big conglomerates in the S&P 500).
  3. Diversify between 10-20 companies and hold for 12-24 months, if not longer.
  4. Sell and gain 50-100% on your invested capital.
  5. Invest in real estate (buy and hold properties).

Here is a chart of every 20% decline we have had in the last 100 years and the returns within the first 12 months when the market did finally take off and go bull.

It is my belief that you can grow your wealth much quicker in the current climate by investing in stocks. However, as I mentioned above, please take this blog with a grain of salt because I usually am the dumbest guy in the room and don’t claim to be any smarter today than I was 12 years ago.

Hand of Business people calculating interest, taxes and profits to invest in real estate and home buying

What If You Don’t Know Anything About Stocks?

I will say this though, I have been quite infatuated with stocks since 2008. I missed that market downturn because I was still very young and raw. I told myself that I didn't want to miss another one, so over the last 12 years, I have sporadically studied Warren Buffet and his investing style. I've also been sitting on dry powder, or cash, since mid-2019.

I highly recommend the books How to Pick Stocks Like Warren Buffet and The Intelligent Investor to mold your thoughts/investment philosophy when it comes to stocks.

Related: What Offers the Best Return on Investment? 145 Years of Real Estate vs. Stocks

It’s fair to say that I’ve been waiting for this moment to invest for over 10 years and time will tell if my instincts were right. So far I’m up 30% and have bought in very close to the bottom. Beginner’s luck maybe, or 10-plus years of study and patience?

Never forget that you should only invest what you can afford to lose. This rings true not just for stocks but also for real estate.

Happy investing!

Are you buying stocks right now? What are your picks?

Tell us your tricks in the comments below.

Engelo Rumora, a.k.a."the Real Estate Dingo," quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate al...
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    Christopher Smith Investor from brentwood, california
    Replied about 1 month ago
    Agreed, but you better understand what it takes to win in the securities market or you'll get your lunch eaten. In my experience most RE investors don't possess the qualities to be good stock investors, and they routinely walk away after losing extremely bitter and angry claiming the stock market is fixed. To be good at securities you need three things: 1) a reasonably sharp mind (don't need to be a genius, but smart). As Buffett says give me a solid guy with a 140 IQ, over one with a 170 IQ who's a flake. 2) Willingness to do a meaningful amount of due diligence. 3) Possess the emotional ballast of a battleship. The last one being the most important (at least it was for me). I buy heavy into the FAAAMG group each time we have an emotionally drive panic sell off like we are coming out of now, and late 2018 where I bought heavy into both. These stock are truly enduring so they will survive almost anything thrown at them. They do go down in panic sell offs, but don't typically stay down long so you can't doddle. Because these killer whales are all best of breed not only do you get a sure big pop when they come back after the panic has run it's course, you also have a sustained winner that will carry you year by year indefinitely into the future. F Facebook A Apple A Amazon A Alibaba M Microsoft G Google
    Michele King Investor from Longmont, CO
    Replied about 1 month ago
    Right there with you!
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks for your great comment Chris. I have gone long and deep in around 10 stocks. Main positions are Wells Fargo, Exxon and Capital One. Not sure how I could have gone wrong in buying these conglomerates at 50%+ from all time high's. Consistent earnings growth, great balance sheets and very solid/consistent dividends. Let's see where the market goes but in my eyes they where no brainer purchases :) Happy investing
    Patrick Pierre New to Real Estate from Garden Grove, CA
    Replied about 1 month ago
    I definitely agree about only invest what you can lose. That's definitely been my method and believe me I've lost plenty. I did miss out on the 2008 market, and I told myself that I'm not going to miss out this time. I've invested a good amount this year of money that if I lose, it will not hurt me. But I've been up and I plan to hold for a very long time.
    Ozzie Sezen Investor from New York
    Replied about 1 month ago
    I disagree with "only invest what you can lose" in regards to well-established companies with solid foundations and growth. Long term investors always gain and pay 15% Tax on capital gain insecurities. Unless you invest in gambling like BTC then I am with you 100%.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Patrick, You should be good long term if you bought good companies. And as long as you don't need to sell urgently to cover any other costs. I wish you much success
    Joe Kato Real Estate Investor from Albion, Rhode Island
    Replied about 1 month ago
    Up 30 % is great but what percent of your assets are invested in these stocks that are up 30%? I hear lots of people on forums saying they bought xyz and are up xx%. But what is your long term strategy for cash flow? I look at a rental asset that returns 15% per year and can count on that for next 10 years. How do you compare that to a dip in stocks you invested in?
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    I'm up 30% on my stock portfolio across the board. 6% average dividend also. In my opinion the stock market was cheap 4-6 weeks ago when I was buying and over 24 months, it will offer much higher/better gains than real estate. Thanks ps. You don't sell when the market dips. I invest for the long term and don't trade.
    Frank Mangano
    Replied about 1 month ago
    Mobile home parks, You own land, tenant owns imovable, personal. I get them water supply and sewage. Cash flow 15-20%, tax breaks and more. I’ve made 30 million in 15 yrs.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Only 30million? Jokes Congratulations mate
    Jeff Bosaw Rental Property Investor from Saint Louis, MO
    Replied about 1 month ago
    I agree with you but the market has already returned to February prices. There are just a few industries that are still low and probably for good reason. If you did not buy in March/April you may have already missed your chance to ride up the gains over the next few years. If we actually start a long recession then there may be another chance to snag up stocks at deep discounts.
    Edd Gilbert Real Estate Agent from Baytown, Texas
    Replied about 1 month ago
    I'm retired Exxon so I have followed it for the better part of 40 years. Today its 54 and paying a 6.5% dividend. On the way down I bought at 50 and 37 and while it's not as attractive today it's a long way from a ugly duckling.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Jeff, My article was written quite a few weeks ago. I stopped buying around then. Didn't pick the bottom my pretty close. Much success
    Andrew DeWeerd Rental Property Investor from Sarasota, Fl
    Replied about 1 month ago
    Jeff, exactly.. I was waiting on a flip to close to liquidate and put it into the stocks, but the market delayed the flip and I didn't get the funds out until mid-May, and it was already back up 30%.. I don't wish for the economy to tank, but if it does with the fallout from all of the businesses impacted for the shutdown, I'll be ready! I could have tapped credit lines, etc, but I would have put myself much thinner than I'd be comfortable with on my reserves, etc, with tenants having already lost jobs and difficult paying rent.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Cash is Kind Andrew and patience always wins. Another door will open. I still like Wells Fargo at today's price. Just my opinion hehe All the best mate
    Landon Reigelman Rental Property Investor from Lee county, FL
    Replied about 1 month ago
    I bought heavily in two months ago and I have made about 20% since. I'll caution that many stocks are sitting back at highs seen since before the crash and buying now could be very detrimental. Just my thoughts, prices will probably be more depressed when Q2 numbers come out. Be careful and good luck!
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Agreed. I started buying 8 weeks ago :) Stopped 2 weeks ago and nibbled a bit more on Wells Fargo as it still looked cheap. Much success
    Mateo Gomez
    Replied about 1 month ago
    I am surprised to see you recommending people read books and the analyze companies to pick stocks. There are teams of brilliant people who do this full time and fail to beat the market consistently. If you are looking to take advantage of a downturn in the overall stock market, especially as a novice stock investor, the best thing to do is buy broad indexes that follow the total market or the S&P 500 (VTI and VOO or SPY for example). You will still get the returns as the market recovers and will outperform most "professional" stock investors in the long run.
    Kenneth Rodriguez from Denver, CO
    Replied about 1 month ago
    I was about to reply something very similar, well put sir.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Mateo, The index funds weren't cheap enough due to the tech companies. The above book recommendations are "Stock Picking Bibles". I highly recommend everyone immerse themselves in those before investing and then they can decide a strategy for themselves. It was a 10+ year learning process for me and some companies seemed just to cheap not to buy. It was like buying a $1 paper not for 30 cents in coins. I'm confident in solid gains in the near future but time will tell off course. Much success
    Mark Beeson Rental Property Investor from Wichita, KS
    Replied about 1 month ago
    Correct. Buffet recommends this strategy for small investors.
    Karen O. from NYC, NY
    Replied about 1 month ago
    What Mateo Gomez ^^^ said.
    Tom Phelan Real Estate Investor from Key West, FL
    Replied about 1 month ago
    "I'm up 30%" or "I'm up 20%" claim many posters. I would like you know if any had a Wall Street portfolio prior Covid-19 and if so sustained losses they are now chasing to recover. If you had $100,000 in the S&P 500 and it tanked 30% leaving you $70,000 , regaining 30% won't bring you even, e.g. 30% x $70,000 = $21,000. Rather than dwell on the latter why not discuss how you can invest in the S&P 500 with guaranteed no loses. If you are going to invest in the S&P 500 why not do so when you can eliminating 100% of loses but keep the gains? Regarding Warren Buffett, didn't he just dump billions of his airline stock rather than "Hold" or buy more , i.e. Cost Average? Why did he unload his airline stocks? Could it be he believes if will take the Airlines many years, even a decade to recover and in the interim his money can do better elsewhere. Lastly, and ironically, when a Wall Street Portfolio fails to deliver the Retirement Income estimated what does the Financial Planner advise, "Why don't you take a 'Reverse Mortgage' on you residence (real estate) to supplement your stock portfolio".
    Fidelis O. Rental Property Investor from Toledo, OH
    Replied about 1 month ago
    Tom, I can sense a lot of wisdom and experience in your post. I have been investing in broad diversified low cost index fund for years and despite the recent bull run I'm still -5.5% YTD. The one year return mentioned in the post is from trough which is a nice retrospective calculation. The problem is that NO ONE knows when the trough is until after it has passed therefore in reality very few people if any actually get those return. I cant even tell you what the stock market will do tomorrow talk less of one year.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Everything is a risk and there is no guarantee. Real estate, stocks an even in life. Nothing is guaranteed. Much success
    Frank Mangano
    Replied about 1 month ago
    I believRE is less risk. Like you said life has no guarantee, stocks have no guarantee, but land will be here when both of them log gone
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    RE is lower risk than stocks. Stocks offer higher, quicker and more passive returns IMO Much success
    Eric Hathway Investor from Southern, New Hampshire
    Replied about 1 month ago
    Great article. Listen to this guy. I bought four properties from the last recession and I'm trying to do the same thing this time. Thank you, Engelo, for putting this out there for the investors chasing dreams right now!
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks for your support mate and well done on your success. Keep the dream alive
    Michael Temple Rental Property Investor from Toledo, OH
    Replied about 1 month ago
    Interestingly I also missed out on the 2008 dive, but I am not talking about stocks. I am referring to real estate. I still hear from seasoned investors who were buying everything that wasn't nailed down in real estate during the 2009-2010 time frames. I completely missed out on that and have kicking myself ever since. I know seasoned investors will tell you there are deals in every single market all the time, but in that time they were literally laying all over the ground. Today I am doing pretty good in stocks and OK in real estate. However, if your prediction is right that the stock market crashes first and last to go is real estate then I am guessing another buying opportunity will be showing up in real estate in about 6-12 months and I so want to be ready this time even if it isn't as good as 2009-2010.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks for your comment Mike. Fingers crossed on real estate going bust in 12 months lol I got the tailwind of the 2008 crash when I moved to the US in 2012. Tonne of great deals even in 2012 and 2013 in the Midwest. Much success mate
    Brian Velez
    Replied about 1 month ago
    Engelo - recommending people to buy equities at these valuations when we're in the middle of a pandemic (coronavirus), social unrest (wealth inequality + black lives matter), and international conflict (trade war with China) is incredibly irresponsible. The only reason the market is up 35%+ since March 23 is because Congress passed a $2 trillion stimulus bill and the Federal Reserve has been propping up financial assets in the U.S. Forward earnings for equities will come down massively in the coming quarters. 2Q GDP is estimated to be down 40% and if we get a second wave of the coronavirus (spoiler alert - we will), 3Q and 4Q GDP will also be negative. We are at the end of a long-term debt cycle that has seen declining interest rates since the 1980's. This is basically the perfect storm for a global economic crisis and we will likely see global currencies devalue to deflate the high debt burdens away. I highly encourage you to read the work of Ray Dalio and others who describe this in much greater detail. For what it's worth - I have a degree in Applied Math and Economics from Columbia, have worked at a hedge fund and investment bank before as a research analyst and am now a business owner. I think it's important we all stay in our lane. I joined this website to learn about Real Estate because I want to learn from others who have experience in the field. Take this for what it's worth but I think this article is very much off-base considering the current climate we are in. Hope this helps someone. Much love, take care, and stay safe.
    Daniel Peavey from Atlanta, GA
    Replied about 1 month ago
    Brian, Question? The US Debt!! It seems as it really don’t matter. Fed printing Trillions, etc!! How does this 25 Trillion debt, what is practical explanation of how this affects the economy? Also, the Fed printing of money, hyper inflation, etc. what is repercussions? Thanks
    Fidelis O. Rental Property Investor from Toledo, OH
    Replied about 1 month ago
    Brian. Your comment is spot on and I hope more people read it. There is a lot of wisdom there
    Stan Wu Virtual Assistant from Bend, Oregon
    Replied about 1 month ago
    Brian you have the pedigree to speak with that background. Engelo had a good response because even the many pros don't perform as good as some average blokes. I'm not Engelo, track the history of pricing and compare. Could be bad but it's easiest for novices. As far as investing during bad times, when, it's his money and maybe his money that is propping up your Amazon deliveries, your Walmart supplies, your hardware store runs. Good feedback from both guys.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Brian and much appreciated. Your guess is the same as mine and the story can be swindled either way lol I've had smart guys like you working for dumb guys like me over the years :) Somehow, I have always have managed to get ahead with the simplicity of my thinking and actions. Some common sense and gut instinct I guess play a part. I truly hope you are correct because I have left too much dry powder. Let's revisit our comments here in the future. As we say in Aussie "She'll be alright" in 10 years hehe Much success
    John Ramos Rental Property Investor from Englewood, CO
    Replied about 1 month ago
    The greatest threat to real estate investing is a moratorium on evictions/foreclosures or rent—in some cases both. Here in Colorado we are under a eviction moratorium. The market for fix/flip may be coming back as many landlords aren’t willing to take “rent risk”.
    Darrell Hay
    Replied about 1 month ago
    I have been a very active trader for over twenty years as well as owning multi family properties almost as long. Stocks are a kick in the pants, and I do it for fun, well, because it's fun. Brokerage accounts only allow you typically to leverage 2:1, but real estate leverage can be 3 or 4 :1 in commercial property 5:1 in residential, with 20:1 seen in 5% down programs for first time homebuyers. The leverage is better in real estate, the dividends are way way higher every month, it is more stable in downturns (no place better than B grade apartments in economic slumps), tax advantaged, and tangible, with complete control. The disadvantages are lack of liquidity, maintenance/utility expenses, and growth potential is or can be slightly less in boom times---although leverage more than makes up for that. Lately I have been killing it in the stock market, investing in real estate, rolling it over into stocks, enjoy trading and wait til the next real estate deal comes along, rinse and repeat.
    Paul Lizell Investor from Ambler, Pennsylvania
    Replied about 1 month ago
    The stock market is extremely overvalued however with the FED pumping money in there stocks may still go up. There are select companies I could think about investing in but stocks are way too manipulated, cryptocurrencies are a far better long term bet.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Paul I lost my A$$ in Crypto lol Got completely sucked in. Learnt my lesson but Crypto sure is still very interesting to me Much success
    Theresa Minifield Investor from Las Vegas, Nevada
    Replied about 1 month ago
    I had no experience in stocks until the COVID-19 fall in early March because I do not like the ups and downs. However, I took time out from my Real Estate and Home Health Businesses, did substantial research, and I took the plunge. On March 23, 2020, the market fell so low that I invested quite a bit of money in a mix of various sectors i.e. airlines, cruise lines, banks, telecomm, pharma, and only 1 retail giant that is not going anywhere, anytime soon. Then in April when oil fell below zero, I could not pass up. I invested in 3 oil companies. 1 has made a good comeback, 1decent comeback, and 1 is coming back slowly. What I looked for is value stocks in solid reputable companies with growth potential, good cash balances or ability to reposition themselves, good dividend yield, and the potential for a strong come-back post COVID-19, and whatever else may come. As I write this, my portfolio is showing a total YTD gain of 16.48% in a little over two months, with zero effort. I have also received dividends from a few companies except airlines and cruise lines which is understandable given how hard-hit these sectors were. On the bright side, they are also my biggest gain makers as of today. Going forward, along with dividend reinvestment, I plan to dollar cost-average because the market is still way below its all time highs. With that being said, the stock market is a gamble and and in order to make long-term handsome profits, one should be cautious and make sure it is money they can afford to set aside, and forget about, for a long time. Is there is a possibility that the market may take another nosedive? Sure. The market is very sensitive to global and domestic events and life happens. Good Luck and keep investing in whatever path you choose.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Awesome stuff Theresa and my story/strategy is similar to yours. I have been patiently waiting for my moment for many years and it finally came. My large/main positions are Wells Fargo, Exxon and Capital One. My biggest gainers are UCO and Carnival (Over 100% as of today). There are just some investments that make so much sense and buying stocks at 1 quarter of book value with good historical financials is just a no brainer IMO. Covid will pass and life will be back to normal. If not, we are all screwed anyway so money/wealth won't matter hehe I wish you all the best. ps. I gambled on oil (UCO) and so fat it's worked.
    Doug Dattawalker Investor from Tracy, California
    Replied about 1 month ago
    I appreciate the thought that has gone into this post. I am still early into my real estate journey and even less in the stock market. I do agree with the concept that first the stocks will tank, then the real estate market. Eventually mortgages will catch up with those who have been unlucky enough to lose their jobs and this will bring back the bargains. However, the stock market has been on a tear since late March and if you had the cash to put in you will have seen some amazing gains. The market is now starting to get close to the previous highs with little financial data to support those numbers. If you are not already heavily back in, I think you may have missed the boat. I agree with Darryll that there may be more pain to come. My advice should be taken with a few grains of salt around a very full margarita glass. Stay well and good luck everyone
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Doug, It's too late now unless we see a pullback. My article was written 3-4 weeks ago. Much success
    John Zulaski from Arlington Heights, Illinois
    Replied about 1 month ago
    I sat in cash until Mid-March. Almost fully unwound position now and back in mostly cash. Quick kill.
    A. Lester Buck III from Houston, Texas
    Replied about 1 month ago
    >Here is a chart of every 20% decline we have had in the last 100 years and the returns within the first 12 months when the market did finally take off and go bull. Uh, let me restate that chart. If I know when the bottom of the market is, I can make a reliable return over the following 12 months. See how that is just a little odd? Or should I draw up a chart showing the incredible and reliable returns by selling at the peak, and then buying back 12 months later? The trick, of course, is knowing what is the peak or the trough. That first line in the chart is very revealing. After the 1929 crash, and then a small upward trend, the stock market didn't actually bottom out for 34 months. I think they are referring to that as an L-shaped recovery these days.
    Jasmine Franchesca from houston
    Replied about 1 month ago
    I agree with this article; I have been able to take advantage of it a little bit; short trading a few stocks here and there, but I am extremely cautious. That said, don't do it if you are not prepared to lose money, because at present time there is an apparent disconnect between investor expectations and what the market is portraying. The higher the unemployment, the higher the stocks get. Fundamental, value, etc do not mean squat right now. It is like a self-contained existence LOL. And the Fed keeps printing money out of thin air. Something has got to give eventually. Good luck with everything, folks!
    Fidelis O. Rental Property Investor from Toledo, OH
    Replied about 1 month ago
    This is a dangerous post... I REPEAT, this is a dangerous post Telling people with no previous equity portfolio to invest after the market has gone up 30% is dangerous> market is currently artificially propped up by the Feds Asking people to pick stocks instead of investing in index funds which protects from diversification risk is dangerous IN the stock market, you get what you don't pay for. Index funds have the lowest expense ratio. Fidelity actually has zero fee funds - google them. Use these instead of stock picking. When you pay for a managed fund that fee is a return you NEVER get back. No one knows what company will rise or fall. it dosent matter if the company is on the S&P or not. There are few comments up that suggest good experience with stocks @Brian Valez and @Tom Phelan. Please read those comments again. Lastly, before investing in stocks please take time to write an Investor Policy Statement (again google it - it can be brief, similar to defining your criteria before you buy a property) and then STICK to your IPS. Buying random stocks because stock market is "down" is a recipe for loosing money. Thank you
    Anastasia M.
    Replied about 1 month ago
    I agree with Fidelis.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Fidelis, Walking across the street is dangerous if you don’t look left and right lol I see something as “dangerous” when folks are ignorant and haven’t done enough due diligence, study and research on a particular strategy. Real estate, stocks or even crossing the street in my simple analogy above. It can all be dangerous Much success
    Nate Reed Real Estate Investor from Austin, TX
    Replied about 1 month ago
    Engelo, I agree with your general depiction of the economic and market cycles, but right now the stock market is selling at absurd valuations after having recovered the losses from earlier this year. The only sort-of rational explanation I've seen for this is that interest rates are so low that infinite P/E's are justified. It is also a haves and haves-nots market, where the "stay-at-home stocks" are making money while others (retail, travel) are getting crushed. Where are you going to find companies selling at 50% discounts as you suggest that aren't value traps? I would sit in cash and wait for stocks to pull back again and longer still for values to appear in real estate.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Nate, Wells Fargo was a no brainer and as of today isn't so much, That company screamed value to me 6 weeks ago when I bought. It's my main position. 8% dividend $300billion in cash Amazing balance sheet and earnings history. Yes, 2016 fake accounts was crap but this company was just a no brainer. Much success
    Ruth Lyons Realtor from Highland, MD
    Replied about 1 month ago
    I second what Mateo and Brian said. And I think it's irresponsible to make a blanket assertion that stocks beat real estate based on your own portfolio of recent success in a few stocks. As a real estate investor, I have much more control over my success than buying stocks. Sure I have a stock portfolio in addition to a real estate portfolio, but I know real estate and can choose investment properties that perform predictably. I don't know enough of what happens at the boardroom tables of any individual company to feel prudent about investing in their stock so I chose a diversified index fund. Historical studies prove that stock analysts don't beat the market or even match the performance over time.
    Cliff H. Rental Property Investor from Nashua, NH
    Replied about 1 month ago
    Isn’t commercial real estate tanking right now? Personally my stock portfolio is already back up and beyond what it was before the crash so might this be a dollar short, day late for some? Everything I’m reading is saying the long term effect of the pandemic is another 6-12 months out, and that doesn’t even include an election year cycle. Markets hate uncertainty and seems we have a lot of that coming up.
    Lalit Jagtap Investor from Buffalo Grove, IL
    Replied about 1 month ago
    During the 2nd week of March, this article would have helped quite a lot to take a byte of stock markets. I have been investing in "common stocks" and not indexes (because of market returns) for 20 years. I agree with author Engelo if you do homework and invest for long term, you can generate great returns. But please do NOT try to time the market. Keep it simple. Only invest in companies, whose business and leadership teams you understand in and out. Since 2017, I have been following similar practices with "multi-family real estate investing. The team first, next the real estate asset and its location. We are in unique times economically, and our world has never seen such an unprecedented amount of money being printed by central bankers. Be careful in taking on leverage in stock or real estate, because there is gonna be payback time. I think fundamentally strong companies, with a strong balance sheet, will survive the coming 'economic storm". But I don't invest in companies whose management borrows money to buy back their own stocks. It is going on since 2016.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Lalit and agreed. Much success
    Natalia Comas
    Replied about 1 month ago
    Hello! Can you please help me through what you invest in stocks? I am beginner and wanted to invest long time ago but cant find a good company I would feel comfortable with to invest. I dont want to get fooled. Thanks!
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Natalia, Don't invest until you are confident in what you are doing. Start with the books I recommend in my blog. Happy Investing
    Leon G.
    Replied about 1 month ago
    After the way I handled the March crash (didn't sell a bit) I built the confidence I needed to decide that I am a stock market investor more than a Real estate one. When the market collapsed I lost close to 100K in one week; don’t get me wrong, I was concerned but much more calmed than the time my tenant went to jail for possession and I was not able to serve her to evict her. When I finally was able to enter MY rental It was a nightmare. It really took a piece out of me to see how much someone can disrespect something that I appreciate and value so much. I was a nerve wrack, I couldn’t sleep well, I was concern all the time and developed a temporal movement on my eyelid. The stock crash was much better, I was concerned for a couple of days, decided to stop looking at the stock prices and after about 5 weeks I was relaxed and happy. three months forward I was able to purchase 50k of stock right at the bottom by taking credit card cash advances; I recovered my 100k and made about 30K from those 50k that I borrowed from the CC companies. The funny thing is, that since I fix my own rentals, my ordeal with that tenant was a cheap one. I spent maybe $2,000 (and obviously did not give her the deposit back) so I lost maybe 100 hrs work and $1,000 dollars. That single experience hurt much more than loosing 100k in the stock market. I am in the process of selling that house (three years after that happened), and although I am profiting about 30k for the sale, when I think about it I remember those times as a bitter life experience. What nobody told me when I was getting into Real Estate is that: 1) You will deal with really untruthful (how did the pipe brake? Tenant: It was like that when I started living here) people. You will have a relationship with a person who dislike you no matter what you do for them. 2) You will always (landlords) be the villain; you won’t be seeing by anyone as a high achiever but as someone who takes money from the poor. This is true from the media, obviously from your tenant and even from your friends and family; Landlords are vilified no matter what. 3) You need to have very thick skin, every time a tenancy ends you enter the house and wonder if a pack of rabid dogs lived in the unit. 4) If you don’t have a lot of houses or you don’t do your own maintenance you wont make a single cent in rentals. 5) Being a landlord is not investing. It is a job, it doesn’t matter what anyone tells you, it is a job. You will have to put a lot of work. 6) It is a risky investment. Everybody says it is safer than stocks... are you sure? consider your slab which can be damaged. foundation damage happens because thousands of pounds of concrete and wood are built over piles of mud, if the pile of mud subsides for reasons that are out of anyone’s control then the slab moves, brakes, then you need to hire someone to lift it right? well, that alone costs $5,000 to $7,000 per pier and at the very minimum you will need 10 piers. Guess what, when they lift the foundation you think the water and sewer pipes will just bend back with the foundation? HAHAHA, no way, they brake and now you need to hire plumbers to tunnel below the slab to fix the pipes. Boom, right there you just spent at least $70,000. It did not happened to me but this situation is common. By the way, insurances don’t cover foundations. 7) Buying and selling is going to be way more expensive that your wildest guess. There are "service men" (Surveyors, Inspectors, lawyers, real estate agents. loan origination officers, appraisers) ready to take your money in such a parasitic behavior that you wouldn’t believe. I can tell that I made more money in real estate than in the stock market. having those $1,500 rent every month for the last 7 years was nice (talking about this house I am selling right now) and the appreciation of seven years was great (which after I paid the line of people ready to take my money wasn’t that much). My numbers were about 15% per year return BUT.... An I cannot emphasize this huge BBBUUUUTTT enough! IS NOT WORTH THE MONEY. A 6% risky investment in the old stock market is better because YOU DONT DO A SINGLE THING!!! This is what I think… It is better to make $1 without doing anything than making $100 by doing everything. If you are thinking about swapping between stock market to rental units; think about this very well. BTW, all my tenants had a credit score above 600, background checked and everything. still I got 3 bad ones of which one was a complete nightmare. My returns were 15% despite all of that (and I am sure I will die 10 years younger after all those bad experiences). I am getting rid of one and still have three to go. Selling them slowly as I am not in a hurry. Something to think about.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Hi Leon, I really appreciate your super detailed comment. I know/feel exactly where you are coming from and agree with many things you mention. Stocks can also be hands on as you must conduct due diligence on the companies and stay in the loop on what's going on in the world economy and with the companies in your portfolio. I've been glued to CNBC for 5+hrs a day for 3 months now for example hehe Bricks and mortar (Real estate) tends to be a safer investment. Paper assets (Stocks) are more hands off and can offer higher/quicker returns. I'm a real estate guy at heart and always will be. Someone told me to "Stay in my lane" above. I am, my lane is called "Making Money" hehe I wish you much success.
    Daniel Peavey from Atlanta, GA
    Replied about 1 month ago
    Great article!! Your hundred percent correct.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks mate
    Chris Martin Investor from Willow Spring, NC
    Replied about 1 month ago
    The stock market recovery has largely already run its course, at least for leading stocks (and leading sectors) and the overall NASDAQ market. Those are the stocks you want to own anyway. https://finance.yahoo.com/quote/%5EIXIC/ then click YTD (Year To Date) and Full Screen. A no-load index fund probably works best for those without experience. Personally, I'd recommend IBD stock lists since their track record is above average. Their tools are good too. In this raging bull market, I've been almost exclusively in CALL options. Yes, the 2020 stock market generates way more $ than real estate. Still some money in builders. DHI, PHM, LEN, TOL, etc. I buy on pull-backs (like now for most of them), out-of-the-money calls, 3-6 weeks out, about 5-10% above current price, for a few percent premium. NOT ADVICE, trade at your own risk!
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Chris. I bought Toll as a small position and am doing quite well. I don't trade and am mostly long on my investments. Much success
    Marc Rose from Dallas, TX
    Replied about 1 month ago
    Be careful investing in single stocks - ETFs are the way to go if you believe in the market generally, and want to diversify
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    You can diversify across 10+ stocks. Still higher risk than an index fund but it's less risky than owning only a few stocks. Much success
    Tim Parker Investor from Bremerton, Washington
    Replied about 1 month ago
    Couldn't agree less. Look at the DOW to gold ratio. About 14. Buy physical gold. Sell the gold and buy stocks when the ratio gets to about 5. The value of stocks is not going up. The value of currency is going down. You'll end up much worse off even though your stocks is worth 300% more in currency because the true value in money is only about 30%. With the Fed pumping trillions into the economy with no value being produced only leads one place - fiat currency down the toilet. Unless you really know what you're doing, you'll get slaughtered.
    John Murray from Portland, Oregon
    Replied about 1 month ago
    I'm no rocket scientist just a multimillionaire. Buy low sell high, use index funds and do not buy individual stocks in 100 blocks or any block for that fact. You may as well throw darts at a spread sheet. Funds have experts running models of past information and future calculations. Find funds like Vanguard Group has these experts. Be cash rich in bad times to purchase at a steep discount this includes real estate. Wealth building is a long term lifestyle not a get rich quick scheme. Work your ass off when you can and never take your health for granted, it is the most important asset you will ever own. Here is the most important part of wealth building, sell when others are buying and buy when others are selling. The last tip, use depreciation, tax deferment and tax safe harbors like Picasso used a brush.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks John, Same here mate. Just an average bloke that picked some stocks when the "world was crashing down". They call it an "overnight success". Well, 10 years of study and research was a long night for me. All the best
    Drew Wahlgren Investor
    Replied about 1 month ago
    I think you've missed the boat if you didn't jump into the stock market 2.5 months ago. In my opinion, there is a good chance for another dip in equities due to second wave, the election, tensions with china, etc. I would pull cash out of the market if you haven't already, in anticipation of another drop in the next 12 months. I have done the same for my small trading account after posting some net gains recently (after dropping in March). I keep more of my money in private equity in real estate because I don't want to "play" with my family's future on something as hard to predict as the stock market!
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Drew and agreed. I will say that there are ways in valuing stocks. When I bought it felt like buying $1 bills for 30 cents in coins. I'm a business guy so somewhat understand P&L's and balance sheets and some stocks just made so much sense at the time. All the best
    Ricky Davis from Searcy, Arkansas
    Replied about 1 month ago
    Two types of gains, realized and unrealized. Until you have realized gains then you have not made any money in the stock market. Stocks are taxed in short and long term as well as your tax bracket. Property is taxed totally different. Yes I have both. Only problem is I have no control of what the CEO does of xyz company where I have complete control over my real estate. I do think the easy money have been made in the stock market. Just my thoughts on the two.
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Thanks Ricky, Do you control your tenants or your property manager? Everything that involves people can be problematic/risky. Much success
    Andrew Hogan Specialist from Indianapolis, IN
    Replied about 1 month ago
    I used to believe that having a portfolio that consists of 100% real estate investments was the best route. Since then, I have come to the realization that the best investors diversify not only across real estate investments but across all assets and commodities. (RE, equities, energy, gold, bitcoin, private ventures, and cash)
    Engelo Rumora Specialist from Toledo, OH
    Replied about 1 month ago
    Agreed mate. There is nothing wrong with firing on all cylinders and having multiple income streams. A true entrepreneur should be well rounded. Finding value can just be a game of "common sense" Much success
    Jessica Hughes
    Replied about 1 month ago
    Article is too late. S&p is already back to where it was in January. Better luck next time!!!!
    Tyler Hallman
    Replied about 1 month ago
    Look into individual markets. Travel sector is booming. Make your money day trading options not investing in the s&p and waiting 20 years.
    Michele King Investor from Longmont, CO
    Replied about 1 month ago
    As a stock market and real estate investor I took 10% of my portfolio held in cash and went into the stock market with my own picks (not using my normal financial advisor) several months ago. Am I up in the market... yes. Will it go up and down for the next 3-5 years which is my projected horizon to hold that portfolio...yes. do I think in the end I will be better off because I bought now....yes. How did I pick my stocks? I approached this portion of my overall investment strategy by using a fee only service. Basically I bought data from a well respected stock service that does a deep dive into each company and then I made my selections. No different than my real estate portfolio. I bought into a well respected service BiggerPockets Pro where I gain access to data and tools that help me make better decisions. I think a blanket statement that real estate is better than stocks, which is better than fine art, which is better than any other investment opportunity is short sighted. You can make money doing anything if you take the time to educate yourself. The person that invented the swimming pool noodle made a lifetime of money bringing to market a piece of foam for $3.99. That was just one of a million investment opportunities. There is room to grow your personal wealth in a variety of ways. I choose to invest in a variety of assets classes to mitigate my overall portfolio risk. There is not get rich quick scheme for most of us.
    Ozzie Sezen Investor from New York
    Replied about 1 month ago
    Great Article Thanks! I have double/Triple invest when CNN fear and Greed index hit below 25, and then start selling and bring down the investment when it goes over 90. My $0.02. When I feel the world is collapsing that is near the bottom of the market to invest heavily.
    Tyler Hallman
    Replied about 1 month ago
    Stocks have been a great option right now if you know anything about options. Airlines are at 1000%+ returns DAILY right now. It is not difficult to take $2000 and turn it into $50k plus in this market. And if it’s possible with 2k to get to 50.. imagine what 50k can do.
    Ernie Mills Jr Investor from Durham, North Carolina
    Replied about 1 month ago
    I'm a real estate guy, but the advantages of buying stocks or RE when everyone else is fearful makes great sense. We purchased several distressed stocks a month ago, and we've done well in this Bear Market bounce. There's more blood left to spill in this bear market, but we just exited a position today with a 33% profit in under 2 months. I highly recommend Sean Hyman's newsletter found @ www.LogicalInvestor.net . It's a great way to diversify.
    Derek Hubbard Investor from Leesburg, Virginia
    Replied about 1 month ago
    I have some serious reservations about the content of this article. While I agree that the general theory is sound (buy low, sell high), I am worried that you may be (unintentionally) misrepresenting the returns that someone would likely expect to make. The table that you showed which compares the stock losses to returns in a 1 year period assumes you are able to buy at the bottom of the market. When is that going to be? I don't know and I would wager no one really does at this point. We could have already hit it or it could be a few years from now. The trough durations in your table range from 3 months to over 5 years. If you buy while the market is still on the way down then your return will be nothing near what is shown in your examples and could in fact be negative. For a buy and hold stock investor that is doing dollar cost averaging, this may not be an issue if the stocks can be held for many years. However, I am wary of recommending to anyone that they try and predict the stock market in the short term (i.e. less than 5-10 years). I also have reservations about picking individual stocks. Even large companies can and do fail. In a portfolio of 10-20 stocks, 1 or 2 failures could have a significant impact on your portfolio. I do currently and plan to continue investing in index funds, for many of the reasons you shared above, but I think much caution is warranted when trying to select individual stocks or time the market.