The two most popular investments and also the most common methods for investments. Property is often portrait as the more lucrative investment among the two, and more than often a tool for the rich man’s portfolio.
Though property investment looks more lucrative but buying a property for investment doesn’t make good sense to me.
If I were to look at the growth of the two – stocks and property, it’s clear to me which is better for my portfolio. One is virtual and the other Real (tangible).
Pace
Property reacts more slowly than stocks in any market and there is no exception for this rule. Should a construction stock grows 10% in the last quarter of the year- September to December, real property prices will most probably gain in June to December the following year, it’s approximately 6 to 12 months behind stocks gain. For relevance comparison, I will stick to construction/property stocks only.
Property prices will pick up only after the rises in stocks and fall after the stocks declined. Regardless of rises and declines, stocks always lead and followed suit by property prices. And in terms of speed, virtual growth is always faster than Real growth.
Property will be good for the slow and steady investor.
Virtual vs Real
It doesn’t take a genius to tell you that stocks are virtual assets while property is Real – at least tangible. No matter how you classify a stock, it’s nothing more than virtual. Both investments report paper gain/loss as long as the investor does not realise his investments and in my opinion I would prefer to buy something Real than virtual. Tangible assets give me a better sense of ownership.
Virtual gains vs Real returns
While it is very possible to witness a stock grows tenfold it is not possible for property. A construction/property stock could grow ten times – 1,000% and in contrast property prices will not grow 1,000% in any market, in any economy. Virtual gains (stock) will always be greater than any Real returns (property).
Given the same amount of capital for both investment options, I am likely to have a bigger margin for my returns from stocks than property investment. And risk is relative; my exposure to losing money will be greater in stocks than property.
Stocks only
I will buy a property for my family, some place comfortable for them to live in, nice and cosy and that will be the only objective for me to buy an estate. Doesn’t matter if the market is going up or down as long as my objective remains, there is no profit or loss for me in any market conditions.
Unless cash rich and I have a couple of millions on hand to buy an estate, and let my money sits around for a few years before realising my profits, acquiring a property through mortgages, loans and monthly instalments for investment don’t make sense to me.
Stocks will remain my No. 1 vehicle for investment despite what I have mentioned above, though I stand to lose more from stocks investments but the upside is apparently more attractive. Faster gains and bigger margins.
MootQuarter 
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