Is it better to invest in real estate or the stock market?
This is response to @mark ferguson's post on "Is it better to invest in real estate or the stock market.
I believe in diversifying your investments and not putting all your eggs in one basket. I don't think it is healthy having 90% of your net worth tied into real estate, just as it not healthy to have 90% all tied up in stocks. I like to see my investments diversified from a holistic approach and see them in 4 parts: S-Corporations, Equities, Cash and Real Estate. My equity (stock market) positions are usually in the low to mid 20%, but i have less exposure to the equities sector today. Whether it is real estate or stocks, I like to keep my powder dry and like to make large investments when there is blood in the streets in the equities market like February 2002, and March 2009 or Atlanta's real estate market in 2012 when equities and real estate prices were trading hands at 1996 prices.
There will be times when the stock market will out perform the real estate market and when real estate will out perform stocks. What we have seen in 2007-2009 financial crisis was a extremely rare situation where both the real estate and stock market crashed together. There is obviously great advantages of real estate in terms of leverage and tax benefits that has already been discussed, but the great advantage for stocks and cash is its immediate liquidity for great buying opportunities when they present themselves.
One should invest and concentrate their resources in an area that they are most knowledgeable in whether it be your own business, stocks, or real estate. I have been investing in the equities market for more than 15 years, so I have built up my knowledge base and experience to comfortably invest in this sector with confidence.