Why Investing in Stocks is Better than Real Estate
As we know that real estate is something that you can physically touch and feel, so you feel it is a tangible good and, therefore, for many investors, it feels more real. Over the years, this investment has generated consistent wealth and long term appreciation for millions of people. You can really take the advantage of huge returns on your investment, depending on the location of your real estate. As per the report of 2017, the area with the best returns is Dallas. Here the real estate investors saw 20.7% in unleveraged returns.
If we talk about the advantages of Real Estate then there are many positive benefits to investing here. Benefits include depreciation, tax deductions. One of the biggest advantages of investing in real estate is that you can sell the property through a 1031 exchange. In this case, you may not even have to pay capital gains taxes. This is applicable, however, in the investment of the money into a similar kind of property type.
If we talk about the investment in stocks, then by buying a stock, you receive ownership in a company. In good times, you will get the profit. When the earnings of the company drop, you may see diminishing funds. Even at the times of economic challenges, you can go through a loss. However, if you take a long-term approach and learn to balance in many areas then you can help in building your net worth at a much greater rate, while compared with real estate.
It was reported that the stock market has had an average annual rate of return of 10.31% from 1970-2016.
When you look over the advantages of investing in stocks then you will find that stocks are very liquid, quick and easy to sell. Stocks are also flexible, and they can be even reallocated into a retirement account. There are many stocks that considerably perform well than real estate in one year. To know about such stocks or penny stocks, you must get in touch with the team of Money Classic Research now. Because of the high volatility of some stocks, it is not strange to watch companies that are averaging 20% or even 50% growth in one year.
At last it can be concluded by saying that each investment has its merits and demerits. So to decide which one would work well for you, you must look at your financial situation and level of comfort.