October 17, 2019 Last updated October 15th, 2019 2,164 Reads share

Things You Must Know About Real Estate vs Stocks Investment

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If you are trying to weigh up Real Estate vs Stocks Investment, there are some different pointers worth considering. Perhaps you are looking to get into Dubai property investment or another project, whatever it may be hopefully these tips may be of use. Please keep in mind there is no definitive answer, everyone’s needs will be different based on the job in hand, but hopefully, this piece will help you consider both sides of the equation.

Real Estate Investment:

Let us first look at the pros of real estate. There is a fair chance if you have not engaged with either real estate or stocks before, you are more familiar with real estate, it just has a more known presence in the general public conscience. One of the biggest pros from a practical point is that real estate is a tangible investment, in that you can live in it. You could be providing yourself with a place to live whilst investing at the same time. Another pro is that real estate is easier to avoid fraud then stocks, where those inclined may seek to fiddle the numbers. Also, important to note is that debt leverage is safer with real estate then it is with stocks and the many years passed have proven real estate to serve as an effective inflation hedge.

But, like with everything real estate has its cons, too. Some critics may point out that the increase in the value of real estate does not increase by much when taking into account the rate of inflation, unlike stocks where we can be looking at a considerable increase. And looking back at that point that real estate can serve an actual practical plus if you are living in your investment if you are not, or you do not have anyone else who is doing so, you will be costing yourself extra money for as long as its unoccupied. Finally, remember there is a lot more hands-on work with real estate investment then there is with stocks.

Entire Stock News

So let’s look at the pros regarding stocks. First of all, you can borrow against the value of your stocks more easily than with real estate, and the fact that there are over 1000 years of the stock market history to prove that there is potential for wealth to be made will no doubt entice many. And don’t forget if you own shares in a company that pays dividends, your share price and your dividend amount may grow over time and your money is not locked up for weeks or even months on end. Also, it is easier to diversify with stocks than real estate in particular with mutual funds. Finally, you can potentially be part of a business through stock shares without having to do any work.

Now the cons for stocks. Perhaps the most obvious point would be that stock prices can fluctuate drastically in the short run, and this can pile on the stress for investors, particularly inexperienced ones. Experts will tell you that to be a successful stock investor it requires an unemotional approach and many investors struggle with that. What also must be noted is that dividend-paying stocks can appear like they have not grown in value at all during sideways market conditions which could be off-putting. It is important to build up as much knowledge on the market as you can beforehand, and this will help to learn the highest dividend stocks for instance, but some may not take the time to do this and fall short.

So, as you can see, there are pros and cons of both real estate and stock investment, whichever one you do choose make sure to research your choice as much as possible and work hard to make the best-informed decisions to help maximize your earning potential.

Nabeel Al Ahmed

Nabeel Al Ahmed

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