Common paper assets, stocks, mutual funds?

I once thought that capital gains from stock investments can be negated from RE losses, but a friend of mine said that it's not eligible. 

No one can predict costs and values that close and small variations will kill you.

I have capital that is currently invested (and performing well) in the stock market - but I've experienced the rise and fall of markets, and would like to own something tangible that will also generate cash flow.  

Cash Flow Market Value Stability Appreciation A Combination of these oCash Flow and Appreciation have an inverse effect oMarket Stability will provide Predictable Results, but Values & Rents remain flat.A few Questions to consider: Is your evaluation standard Repeatable (i.e. 10-12% CAP Rate: Can you continue to find properties which meet this criteria?)

PS - If you follow the economist Harry Dent, he'd advise to sell everything and stock up on cash.

With out us (real estate investors) they are subject to the stock market as their primary source of wealth building.  

I'm predicting a recession in the next 2-3 years.

My husband and I aren't looking to get rich quick, we just want to invest in our future and most importantly the future of our children and not break our spirit in the process.At the moment we have our nest egg funds in the stock market, but have really focused on the idea that REI is a much more sound and satisfying investment. 

I own 2 families homes partly having to avoid dealing with the city regulations required in 3+ families and also because the majority of the housing stock in the Jersey City/Union City/North Bergen/West New York area consists of 2 family homes.