Real estate v stock as an investment

If you do a search on the internet, most of the articles argue that stocks are better than real estate as a long-term investment. They cite the statistics of various companies that focus entirely on stocks. The bias is obvious. Although stocks have clearly outperformed real estate over the years, one of the main reasons why real estate is arguably the best long-term investment is overlooked in all the comparisons on the Internet.

This may be the single best reason to invest in real estate. Some retirees lost large amounts of their pension funds due to the stock market crash (April 2001), many lost large amounts of their pensions due to technology obsolescence pushed by venture capitalists and large brokerage houses, and some lost their entire pension funds. Corporate accounting fraud. This last one is the most important reason not to invest in real estate, or at least not to put all your eggs in the stock market basket. This makes real estate not only a little better as an investment, but 10,000 times better. How can you compare two investments where one can only be lost due to economic disaster, fraud or other criminal acts and the other is not lost because it is a piece of land. Real estate simply does not suffer from such fraudulent and uneconomic stock tragedies.

Consider the following companies as just a few of the major companies involved in accounting fraud or various corporate frauds: Adelphia, AES, Duke Energy, El Paso, Merrill Lynch, Reliant Energy, Rite Aid, Parmalat, AOL Time Warner, Dollar General, PNC Bank, Cendant. , Citigroup, Computer Associates, General Electric, ImClone, Peregrin, Xerox, Bristol Myers, HPL, JP Morgan Chase, Kmart, Lucent, MicroStrategy, Network Associates, Tyco, Enron, Global Crossing, Halliburton, Omnimedia, Merck, Qwest, Sunbeam, and there are many others, including major accounting firms and major stock brokerage houses. The losses associated with these companies are in Billions. These are losses suffered by millions of hardworking Americans. These losses have nothing to do with the market that has declined. These losses have nothing to do with our economy or investment principles. These are the losses that people have suffered due to corporate and accounting fraud. How good does the stock market look right now? Dell lost $50 billion in market value in one day, as quarterly profit missed expectations. On the same day, news broke that KPMG was on trial for the largest accounting fraud in US history. How safe is your pension fund?

Almost every day I see articles in newspapers across the country about more scandals, about another stockbroker, financial service provider or mutual fund paying some unusual fine or gross fraud, misrepresentation or some other criminal violation. The Wall Street Journal August 29, 2006 Reported serious problems at Ameriprise, formerly American Express Financial Advisors. Ameriprise’s arm Securities America settled for $22 million. The story goes that David McFadden, a hot-shot broker at Securities America, was lying to Exxon employees about their pensions. Under the McFadden administration, Bradley Simon’s pension fund was reduced from $700,000 to $267,000. Or take another McFadden customer, Pat Salatich, 73, a nurse at Exxon for 25 years. In the year In 2001, she deposited $565,383 from McFadden and, after withdrawing only $189,000, realized she had only $73,000 in the account before stopping the bleeding. She now lives on about $1,500 a month in Social Security.

Ron and Pam Yandell of Mansfield, Texas, handed over $1.4 million of their pension fund money to shareholders who had invested in risky tech stocks without their consent. They lost $230,000 in the tech disaster. After a five-year legal battle and a lot of expenses and stress, they won a $990,000 prize, but no one is collecting it. He’s gone. These types of issues are a dime a dozen.

Real Estate When the real estate market (which means the economy is stockpiled and possibly stocks) is in a state of dramatic volatility, that is rare compared to the low volatility in the stock market and all the corporate fraud. Real estate stocks don’t have the wild roller coaster ride they have almost every day. More significantly in this day and age, one should not accept the fraud and scandal that one manages (and loses) for you.

look around. Real estate is everywhere, and someone owns every parcel. Like a stock certificate the value cannot be lost. While there may be accidents and acts of God that can cause losses to your real estate, you can insure yourself against such things with a very small insurance premium. Does your stockbroker personally guarantee that you won’t lose the value of your stock, or does it provide insurance to cover you against losses?

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