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Laval wrote,

I've always been puzzled because advocates of stock investing ignore real estate investments (and vice versa). I bought investment real estate in the 70's and 80's when it was enormousely tax advantaged, and had above average returns. The picture changed dramatically with the Tax Reform Act of 1987.

Real estate in the 70's had a much higher return than real estate in the 80's and 90's, largely because it was an inflation hedge. Since the start of the bull market in 1981, stocks have appreciated more than real estate in all but a few locations.

As JABoa points out, investment real estate also has the disadvantage of requiring hands on management. (I also don't want to field calls about plugged toilets at 3am.) I suppose you could hire a professional management firm to oversee your investment, but as in the equity markets, that reduces your return.

intercst
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