Why you should NEVER invest in stocks over real estate...

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes

I like a portfolio of index funds and real estate (with a higher allocation to real estate because I understand it better).

I am one of those wankers trying to hit analysts projections (minus the expensive suits).

14 Reply

Engelo RumoraBusiness Member

OP

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

7y

Originally posted by @Mike Dymski:

I like a portfolio of index funds and real estate (with a higher allocation to real estate because I understand it better).

I am one of those wankers trying to hit analysts projections (minus the expensive suits).

To be honest, I don't mind an index fund.

Just not now (Hoarding cash for the time being).

Come on mate

You need at least one Zegna or Canali hehe

Have a great day

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Andrew B.

Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes

7y

Or, here's a novel idea. Invest in the vehicles that fit your comfort, risk and knowledge level. Talking about a single company is the same as looking at a single rental property. Local real estate markets can experience volatility as well. What if you own one rental in Ohio and a major employer leaves town, and 20% of the workforce there gets laid off?

I agree that real estate can be an amazing investment vehicle when used properly, and I love it because its something you can personally influence by forcing appreciation and using sweat equity to save money, however, to state that real estate is the reason you should NEVER do anything is pure ignorance. Diversification is an amazing tool.

My personal motto: Blanket statements are NEVER good.

14 Reply

Engelo RumoraBusiness Member

OP

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

7y

Originally posted by @Andrew B.:

Or, here's a novel idea. Invest in the vehicles that fit your comfort, risk and knowledge level. Talking about a single company is the same as looking at a single rental property. Local real estate markets can experience volatility as well. What if you own one rental in Ohio and a major employer leaves town, and 20% of the workforce there gets laid off?

I agree that real estate can be an amazing investment vehicle when used properly, and I love it because its something you can personally influence by forcing appreciation and using sweat equity to save money, however, to state that real estate is the reason you should NEVER do anything is pure ignorance. Diversification is an amazing tool.

My personal motto: Blanket statements are NEVER good.

Thanks for your comment Andrew,

I recently did a blog for BP with a blanket statement and it received a tonne of criticism.

I'm super glad that it got folks thinking, responding and contributing.

That's the point anyway.

It's an opinion based of my experiences.

Wrong or right.

It doesn't matter.

As long as there is a chance that it helps just 1 person or opens their eyes to something that they failed to see.

Much success

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1 Reply

Justin H.

Kirkland, WA · Member since 2018 · 25 posts · 39 votes

7y

Never trust anybody who makes blanket statements.

7 Reply

Engelo RumoraBusiness Member

OP

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

7y

Originally posted by @Justin H.:

Never trust anybody who makes blanket statements.

Sorry you feel that way.

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

Yes rents do go down. When supply outstrips demand, rents, can, do, have and will go down. Ive had rents drops when supply, new housing being built as an example, outstrips the current demand.

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Jer Yeung

Specialist · Los Angeles, CA · Member since 2018 · 42 posts · 50 votes

7y

Originally posted by @Andrew B.:

Or, here's a novel idea. Invest in the vehicles that fit your comfort, risk and knowledge level. Talking about a single company is the same as looking at a single rental property. Local real estate markets can experience volatility as well. What if you own one rental in Ohio and a major employer leaves town, and 20% of the workforce there gets laid off?

I agree that real estate can be an amazing investment vehicle when used properly, and I love it because its something you can personally influence by forcing appreciation and using sweat equity to save money, however, to state that real estate is the reason you should NEVER do anything is pure ignorance. Diversification is an amazing tool.

My personal motto: Blanket statements are NEVER good.

HAH. I like what you did there.

agree 100%. comfort, risk and knowledge level should be key drivers.

Regardless of if you're investing in the stock market, real estate, precious metals, foreign currencies, etc, etc - if you're only expecting it to go up, you're missing part of the picture. I can't think of anything worth investing in that isn't cyclical or doesn't have any downside...

0 Reply

Mike Dymski

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes

7y

"You need at least one Zegna or Canali hehe"

Maybe one will be under the tree from my family next to my annual gifts of socks and underwear from Target.

2 Reply

Victor S.

WorldWide · Member since 2016 · 1k+ posts · 1k+ votes

7y

Q: What are we going to see when we pull up the 100-year S&P chart?

7 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

Originally posted by @Victor S.:

Q: What are we going to see when we pull up the 100-year S&P chart?

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Engelo RumoraBusiness Member

OP

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

7y

Originally posted by @Victor S.:

Q: What are we going to see when we pull up the 100-year S&P chart?

The Vanguard S&P 500 is a solid long term investment.

Low dividend tho.

I'm use to 15%+ net cashflow on my investments.

Probably wouldn't get out of bed for anything less lol

Got to love the Midwest :)

Thanks

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Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

7y

@Engelo Rumora. Ah yes another BP thread trashing the stock market. As noted above making blanked statements is a bad idea. Not investing in the stock market is also a bad idea. The S and P 500 is up like 300 percent since 2009. This recent volatility doesn’t last forever. When the next crash comes, buy more. You earn 7-9 percent long term and it’s 100 percent passive (RE is not) and well diversified (some RE investments are not) and 100 percent liquid (most RE investments aren’t).

9 Reply

Engelo RumoraBusiness Member

OP

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

7y

Originally posted by @Caleb Heimsoth:

@Engelo Rumora. Ah yes another BP thread trashing the stock market. As noted above making blanked statements is a bad idea. Not investing in the stock market is also a bad idea. The S and P 500 is up like 300 percent since 2009. This recent volatility doesn’t last forever. When the next crash comes, buy more. You earn 7-9 percent long term and it’s 100 percent passive (RE is not) and well diversified (some RE investments are not) and 100 percent liquid (most RE investments aren’t).

Thanks for your comment Caleb,

It's great to see so many folks investing in stocks.

I'm glad that I struck a nerve and as I mentioned above, the message behind most of my content (I've been a BP blogger for 3+ years now) is to make folks stop and think for a second.

It also seems like blanket statements work amazingly well.

My apologies to anyone that took it the wrong way.

Thanks again and much success

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Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

7y

Originally posted by @Engelo Rumora:

Originally posted by @Caleb Heimsoth:

@Engelo Rumora. Ah yes another BP thread trashing the stock market. As noted above making blanked statements is a bad idea. Not investing in the stock market is also a bad idea. The S and P 500 is up like 300 percent since 2009. This recent volatility doesn’t last forever. When the next crash comes, buy more. You earn 7-9 percent long term and it’s 100 percent passive (RE is not) and well diversified (some RE investments are not) and 100 percent liquid (most RE investments aren’t).

Thanks for your comment Caleb,

It's great to see so many folks investing in stocks.

I'm glad that I struck a nerve and as I mentioned above, the message behind most of my content (I've been a BP blogger for 3+ years now) is to make folks stop and think for a second.

It also seems like blanket statements work amazingly well.

My apologies to anyone that took it the wrong way.

Thanks again and much success

Nothing wrong with making people think but I think using blanked statements and often misleading information isn’t the way to do it.

4 Reply

Engelo RumoraBusiness Member

OP

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

7y

Originally posted by @Caleb Heimsoth:

Originally posted by @Engelo Rumora:

Originally posted by @Caleb Heimsoth:

@Engelo Rumora. Ah yes another BP thread trashing the stock market. As noted above making blanked statements is a bad idea. Not investing in the stock market is also a bad idea. The S and P 500 is up like 300 percent since 2009. This recent volatility doesn’t last forever. When the next crash comes, buy more. You earn 7-9 percent long term and it’s 100 percent passive (RE is not) and well diversified (some RE investments are not) and 100 percent liquid (most RE investments aren’t).

Thanks for your comment Caleb,

It's great to see so many folks investing in stocks.

I'm glad that I struck a nerve and as I mentioned above, the message behind most of my content (I've been a BP blogger for 3+ years now) is to make folks stop and think for a second.

It also seems like blanket statements work amazingly well.

My apologies to anyone that took it the wrong way.

Thanks again and much success

Nothing wrong with making people think but I think using blanked statements and often misleading information isn’t the way to do it.

That's your opinion and you have a right to it.

The same as I have a right to mine.

Your perception is that it's misleading and mine isn't.

Thanks

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Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

7y

Originally posted by @Engelo Rumora:

WOW!

Now that is some "C Class" volatility going on in the stock market.

General Electric- Will it ever go up?

Large Cap Technology seems to be going down the drain.

The stock market is down 10% in the past 6 weeks.

"No thanks." That is way too much volatility and is just not worth it to me.

I guess stock markets don’t always go up forever.

What does though really?

Rent prices do

People still need a place to live whether Apple stock goes down 30% or Facebook decides to disappear.

Never mind Snapchat. Does that still even exist? lol

At the end of the day we all work hard for the dollars we are able to save and spend. Protecting your nest egg seems to be more of an uphill battle than even acquiring those funds in the first place.

Temptations with shiny objects always seem to get me in trouble at least.

Learn from me, the best investments I have ever made are long term real estate assets.

Even during the global financial crisis 10 years ago you saw people move down the ladder.

Class A tenants moved down to B, B to C, and C to D.

What actually happens when you own a B class property during rough economic times?

It just means a higher quality A tenant that is making less income will most likely be occupying your B class rental.

Diversification is the key to any successful investment portfolio that I’ve ever seen.

Even the most "sophisticated" financial professionals gravitate toward an allocation of 10%-30% in real estate investment properties.

I don't have a crystal ball, predicting future real estate prices regardless of what coast you live in seems to be more of a roll of the dice.

Therefore cashflow is King (take it from the Real Estate Dingo himself).

When in doubt revert back to consistent cashflow that hits your bank account on a monthly basis. Just because it isn’t the sexiest investment that will make you millions overnight, (what really does?) it will begin the consistent path on your way towards financial freedom.

Plus, I'd rather be my own "CEO and team of executives" on decision's made relating to every property I buy, rather than some other wankers in $5,000 suits only trying to hit analysts projections so that they can get a fat check at the end of year.

Thanks for reading

Your favorite Aussie

Engelo

Not really the best comparison. Volatility in stock price doesn't matter unless you are selling, no different than home value. Rent is more comparable to dividend value.

As far as your comments on specific stocks. The huge drop in GE stock price could be viewed as a buying opportunity. Yield is well over 6% at this price and the company, although going through restructuring, owns significant assets, both physical and intellectual. How many companies make jet engines? They own a profitable medical division. Their oil and gas business, combined with renewable energy businesses put them in the middle of all things energy. I am not a stock expert, but by no means is GE permanently doomed. Stock prices are driven off emotion.

Really this comes down to specialization. People who are experts in the stock market can do well in the stock market. People who are experts in REI can do well in REI. I don't view it as one over the other. I can site countless people who made riches in both as well as people who lost everything in both.

6 Reply

Engelo RumoraBusiness Member

OP

Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes

7y

Originally posted by @Joe Splitrock: