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What is a worse investment: stocks or real estate?

Most people are very concerned about where to put their money these days. Two of the most common options are real estate or stocks. This chart of the past 33 years in the stock market shows that the market is currently operating at levels from 1996.

If you purchased GE (General Electric) or Coca-Cola stock in 1996, and did not sell it, the value of those shares would be unchanged today. Stocks that seemed like a stable investment back then werejust that – stable and flat. Reflecting on the ups and downs in the housing market, the chart below shoes current housing prices equivalent to that of 2003.

 

 

If you purchased a $500,000 piece of property in 2003, with 20% down and a 30 year fixed-rate mortgage at 6%, the mortgage interest tax deductibility would have saved you $60,000 in 5 years. Combine that figure with real estate tax write-offs, depreciation, and the fact that you have a place to live. Not a bad deal.