investment options

robby · #1 (**permalink**) 10-10-2005, 07:32 AM

If you had to choose between investing in the housing market, stocks or something else, what would you invest in and why?

jmjj215 · #2 (**permalink**) 10-10-2005, 10:00 AM

Housing market. We rent at the moment, and we're looking toward dallas, which most say is an "economic anomaly" at the moment (prices are much lower than they should be). So I'm not worried about coming in at the top.

sweeps · #3 (**permalink**) 10-10-2005, 10:55 AM

Stocks, for a couple of reasons.

1. Stocks easily outperform other investments over the long haul. Now's the time to buy up as much you can while the stock market is still moving sideways.

2. The housing market is overheating. I doubt there will be a "pop", but housing prices must level off soon and maybe even decline a bit. Particularly with interest rates on the rise.

jmjj215 · #4 (**permalink**) 10-10-2005, 12:34 PM

Quote:

The housing market is overheating. I doubt there will be a "pop", but housing prices must level off soon and maybe even decline a bit. Particularly with interest rates on the rise.

But you do need to look at it market by market.

34saving · #5 (**permalink**) 10-10-2005, 12:50 PM

I'm very concerned about the stock market and real estate. (Not to mention I think they're more related than most of us want to admit.) I guess I'd have to say "other" -- I just don't know what "other" is . . .

BTW, just two (of many) ways houses and stocks are related:
People are spending $ out of home equity. Equity down = spending down = stocks down
Baby boomers need something to live on as they retire. BBs sells stock = stock down. BBs sell house = house down. I'm beginning to think one of the safer RE investments out there are 50s - 70s ramblers that can accomdate single level living. They're not hot (at least not around here), but when the aging BBs can't afford the brand new detached townhome single level living houses that they want to move into . . .

sweeps · #6 (**permalink**) 10-10-2005, 12:58 PM

I don't disagree with either of you, Jesse and 34saving. I think there are certainly very good opportunities in the housing market -- *IF* you're willing to spend the time researching them. In fact, you probably can make a killing. However I would argue that most people either can't or don't want to do the necessary research.

A stock index fund, on the other hand, is a bit of a no-brainer and has (again historically speaking) been a great investment over long periods.

A third general concern I have about investing in real estate is that many people have a lot of their wealth already tied up in real estate: their primary residence. If a system-wide real-estate decline happens, you're getting hit with a double whammy.

jmjj215 · #7 (**permalink**) 10-10-2005, 03:47 PM

I would invest in real estate with my return being based on a return using a non-leveraged type model. So if I'm not leveraged w/ RE, a downturn for a bit wouldn't be too bothersome. You'd still be cashflowing.

VJW · #8 (**permalink**) 10-10-2005, 05:34 PM

Quote:

Originally Posted by Sweepsplayer

Stocks easily outperform other investments over the long haul. Now's the time to buy up as much you can while the stock market is still moving sideways.

Being down thousands of points in inflation-adjusted dollars over the last five calendar years is hardly “moving sideways”.

Quote:

A stock index fund, on the other hand, is a bit of a no-brainer and has (again historically speaking) been a great investment over long periods.

‘Buy & Hold’ is passe now.

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VJW · #9 (**permalink**) 10-10-2005, 05:40 PM

Quote:

Originally Posted by jmjj215

I would invest in real estate with my return being based on a return using a non-leveraged type model. So if I'm not leveraged w/ RE, a downturn for a bit wouldn't be too bothersome. You'd still be cashflowing.

I agree. A non-leveraged investment would at least cover the nut.

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sweeps · #10 (**permalink**) 10-10-2005, 05:47 PM

Quote:

Originally Posted by VJW

Being down thousands of points in inflation-adjusted dollars over the last five calendar years is hardly “moving sideways”.

Even the more reason to invest in stocks.

Quote:

Originally Posted by VJW

‘Buy & Hold’ is passe now.

Just because something is passe doesn't mean it's not prudent.

VJW · #11 (**permalink**) 10-11-2005, 01:22 AM

Quote:

Originally Posted by Sweepsplayer

Even the more reason to invest in stocks.

You’re reminiscent of the stock brokers during the last five years.

After the second down year, they said you should buy stocks, as the stock market hasn’t gone down three years in a row since the Great Depression, making it a terrific buying opportunity.

After the third down year, they said you should buy stocks, as the stock market has never gone down four years in a row, making it a terrific buying opportunity.

After the fourth down year, a lot of Wall Street firms adopted the position that “Buy & Hold” was no longer operative.

If you continue to think that the lower the stock market goes, the more it is a buying opportunity, you will soon have the opportunity to lose even more money.

Quote:

Just because something is passe doesn't mean it's not prudent.

It’s passe specifically because it became no longer prudent.

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