Home |Top 1000 | Articles | Resources | Research Stocks | Investing Newsletter | States | Investing Resources | Real Estate Investing | Tax Deed Sales |S P 100 index | Tax Lien Sales |LLC | Expo
Real Estate Investing Definitions| Dow Jones Stock Research|  Tax Lien Certificates| DOW Index
 

Arizona, California, Florida and other states are featuring online tax sale investing... Click here to discover how you can safely earn 18% to 240% per year in government tax liens and deeds using your own self-directed IRA

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Feature Article: Stock Investing vs. Real Estate Investing
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
There has always been an endless debate over whether stock investing or real estate investing is better. During bear markets, many people become disillusioned with stock investing and want to become real estate investors. This is what is happening now. Just about everyone I talk to is fed up with the stock market and wants to become a real estate investor. Conversely, during bull markets everyone wants to become a stock market investor. This is what occurred during the 1990s.

Rather than speculate about which investment is best, I spent over a decade researching these two investment choices. Here are some important facts regarding real estate and stock market investing:

  1) Investment Return. On average, stock investing outperforms real estate investing. Stocks return 10 to 11 percent per year on average, while real estate returns 7 to 8 percent per year on average. These numbers represent national averages. Returns on individual stocks or real estate properties can be much higher. For example, it is not uncommon for some stocks to double or triple in one year, and investment returns on real estate properties can be greater than 100 percent a year.

  2) Investment Risk. On average, real estate investments are 50 percent less volatile than stock market investments. However, most active real estate investing does require the assumption of debt, potentially increasing investing risk.

  3) Liquidity. Stock investments typically have much greater liquidity than real estate investments. You can sell or buy stocks or mutual funds in a matter of a few minutes, but it can take weeks or months to sell a real estate property.

  4) Time. Real estate investing is usually more time consuming than stock investing.

  5) Hidden opportunities. Both real estate investing and stock market investing offer hidden opportunities. For example, small stocks have returned 12 to 13 percent per year on average, beating large stocks. Real estate investment trusts (REITs) allow passive real estate investors to buy real estate and earn up to 15 percent per year without the liquidity issues and time commitments typically associated with active real estate investing. Tax lien investing is another largely unknown, mostly passive real estate investing method that can result in investment returns of 15 to 20 percent per year in some cases.

When you consider all of these factors, there is no clear winner. If you want a low-risk investment with a decent return, real estate is a good choice. If you want higher returns and more liquidity, stock market investing is the best choice. My solution was to become both types of investors, and use some of the hidden opportunities in both stock and real estate investing to increase my investing success.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Company Profile: Compudyne Corporation (CDCY)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The recent stock market correction has produced a lot of incredible bargains. CompuDyne is a prime example. CompuDyne supplies security equipment and services to government and private clients. Their products include blast-proof doors and windows, security fencing, electronic locks, security management software, and quick fabrication cells for prisons. The U.S. government plans to spend over 30 billion dollars over the next several years on homeland security. Combine this with state and private security spending worldwide and you have an industry that is growing exponentially. ComuDyne has reasonable debt (less than 50 percent of equity); a P/E ratio of 15 that is much less than the long-term projected growth rate in earnings of 25 percent; and high stock ownership by company insiders, making them accountable. It is rare to see a company so reasonably priced in a rapidly growing market.

The most common trait among millionaires is that they started their own business. I am a firm believer that if you ever want to be truly happy you must eventually go it alone. It is becoming increasingly hard to rely on large corporations for a steady paycheck. Technology and the Internet have made it easier than ever before to start a successful business.

If you have an investing question, email me at roguereport@rogueinvestor.com.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Disclaimer: There are no guarantees in investing. I make no assurances regarding the investment information presented in the Rogue Investing Report.

Issues of the Rogue Investing Report are archived at http://www.rogueinvestor.com/investor_newsletter.html.

Mind Like Water does not support spamming. To subscribe or unsubscribe to this newsletter, reply to this message (or email newsletter@rogueinvestor.com) and include "subscribe" or "unsubscribe" in the subject header. We invite you to forward this newsletter to your friends.