Recently, I was asked, "Should we invest in real estate or stocks?"
Today’s Chart of the Day is the long-term total return of the FTSE Nareit All REITs Index compiled by FTSE Russell company.
The chart shows the total return of $100 invested 30 years ago, which shows growth to $1,547 for real estate, brown, and $1,561 in stocks, blue. This is only a $14 difference. This indicates that historically, someone should have been indifferent, except that real estate had a higher volatility during the Great Recession in 2007-2009.
The past is no predictor of the future, but, as with all things, you would imagine as long-term investments theoretically these two investments should track together. When the price of real estate investments are too low, people will sell stocks to buy it, and vice versa, keeping both within a close range of each other.
About the Author
Samuel A. Kiburz
Samuel serves as Senior Vice President, Chief Investment Officer for the Crews family of banks. He manages the individual investment holdings of his clients, including individuals, families, foundations, and institutions throughout the State of Florida. Samuel has been involved in banking since 1996 and has more than 20 years experience working in wealth management.
Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.