Real Estate Vs Stock market which one is better

Discussion in 'Economy & Infrastructure' started by ajay_ijn, Aug 4, 2009.

  1. ajay_ijn

    ajay_ijn Regular Member

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    both seem to consistently high rate of returns over long peroid of time.
    but which is best for young Indians in their 20s and 30s, have the capacity and risk appetite to invest such things.
    which is better for short term like 1 or 2 yrs and long term of 10 yrs or more?, which is more volatile?

    obviously real estate is less volatile than stocks. stocks sometime correct by more than 50%. but didn't see real estate prices correcting by such a big figure.

    most general public fear stock market when they see it falling like pack of cards in short amount of time. But real estate prices , especially in a growing economy never collapse like that.

    the major risk for real estate is ofcourse land grabbing and associated legal problems.


    BTW how much returns would best performing mutual give?.

    Does anyone has rought idea about futures, options trading in India? do they have bright future?
     
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  3. S.A.T.A

    S.A.T.A Senior Member Senior Member

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    Better safe than be sorry..Real estate.
     
  4. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    all your answers depend on your risk taking appetite. this is your hard earned money that you will invest so look at this way, can you see your rs100 turn to rs50 over night or over a period of time, the return could be in the positives as well, if your answer is no then you are not made for high risks, but if you feel you can take that shock and still invest during those down times then yes you have it for investments where high return, high loss is the name of the game.

    build up a portfolio which you need to diversify into various investments. a portfolio should contain debt based inv, equity based, realty, gold, etc. what % of money where you put depends on your risk taking appetite.

    debt based: securities, bonds, tax saver schemes, mutul funds that deal in such investments (low risk, low return, long term investments – lock in period of 3 yrs or more)

    equity based: daily trading, commodities, stock/shares.
    if you dont have time and expertise take the route of mutual funds, fund manager will look after your investments.
    insurance, where you will be sold ulips. advantage is there is a minimum return associated, but the a decent chunk that you invest goes as commission. (companies will always promote this because huge commissions are involved, best is if this product is not seen as a investment tool)
    (these investments are associated with high risk return/loss)

    realty: indian realty market has at times been related with over heating so this sector has uncertainty to it, even with the global down turn market has corrected hardly. depends on the location. (relatively a safer investment)

    gold: depends on a lot of issues, a lot of global issues determine the rate at which it trades. This is one tool which might give you no return for a long time and then all of a suuden there might be fluctuation. now there are even mutual funds that deal in it(relatively a safer investment)

    you are in your 20s, and i feel people that young should have bigger share of their investments where risk runs high.

    short term: blue chip shares are a hot cake, mid caps have underperformed so there lies the opportunity. (do your research before investing and be convinced, never go on tips)

    long term: its your call.

    PS: never ever put all your savings/earnings in just one investment tool or you will be taken for a ride sooner or later.
     
  5. 1.44

    1.44 Member of The Month SEPTEMBER 2009 Senior Member

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    These days real estate however one of my uncles has a real feel for the markets so he's doing great.However you'll have to be careful with your money in either one.
     
  6. Daredevil

    Daredevil On Vacation! Administrator

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    Right now, neither of them are good to invest in. Wait for prices to fall further both stocks and real estates and then buy. But you should have something to fall back upon when nothing 'hot' is happening in the market.
     
  7. ajay_ijn

    ajay_ijn Regular Member

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    can we consider mutual funds as medium risk and invest in that. you are sure that an expert is doing the job and also he is diversifying a lot to reduce the risk.


    i have a doubt here. 10 yr Govt bonds are trading at around 7% while fixed deposits while SBI fixed deposit for 10yrs gives us 7.75%. So which is better?. one can ofcourse sell and buy bonds but may not give much returns.
     
  8. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    not quite.

    there is a fund manager who heads a team of professionals who track stocks and the final call is taken by the fm.

    while investing in a mf always make sure that you track the history of the fund, the returns, stocks invested in, sectors invested in, the frequency of transfer etc, would give you a fair enough idea of how the things are with the fund.


    while investing in a mf, if the investment is long term (over a period of 1 year with out a switch) all gains made attract no tax (termed as long term capital gains), not the case with fd. yes fd can/should also make a part of your portfolio investment.
     
  9. Auberon

    Auberon Regular Member

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    There are no hard and fast rules, though real estate is generally considered a safer bet for the long run, yet there are investments which ll give you profits impossible in the stock market within a couple of years, but also properties which ll appreciate too slowly, or actually depreciate, as 'safe n sound' investors sometimes find to their horror :) Also, don't look at the price correction alone, pricing is all right even now since it was pretty decent to begin with, price is all right compared to trade, you might be stuck with properties with great valuation but no willing buyers.

    Secondly, real estate market is not independent of the stock market and , there's property developers, capital managers, RE investment firms, MBS trusts etc., your property isn't insulated and in you are invested in big time, the general ups and downs of the markets will have an effect on your investment too.

    Also btw, land grabbing related legal probs work both ways, while for a personal investor, they may be great risks, as you rightly point out, for full-time industry professionals, it is sometimes these very deals that turn out to be most profitable, sorting out technicalities, court cases, buying disputed lands for dirt cheap prices and getting litigations cleared by co-operating with The Powers That Be are all necessary evils! IMHO for a pvt. investor, stick to an asset with clear titles in an area you can take care of it regularly, and the risk is miniscule compared to the risks in areas fields of investment.


    As for the stock market, I don't know much but if I had to invest I'd stick to the bare basics I know and go from there, diversify broadly, low cost MF's, ELSS, some index funds, bit of gold, regular saving and a long term retirement plan.
     
  10. Vikramaditya

    Vikramaditya Regular Member

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    real estsate is better option
     
  11. india rock

    india rock New Member

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    you guys on the same situation as china now ,i prefer real estsate too,and i already prepare 50000~60000usd for a condo
     
  12. SHASH2K2

    SHASH2K2 New Member

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    I would say that If a guys has huge amount of money and want a safe investment he will prefer Real estate. If a guys has small amount of money but an appetite for risk stocks will definitely give better return if he plans well.
     
  13. The Messiah

    The Messiah Bow Before Me! Elite Member

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    Real estate is where its at.

    My friend made 30 lakhs in one month by buying and selling properties (no building...only plots) in gurgaon!
     
  14. amoy

    amoy Senior Member Senior Member

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    personal experience: real estate, and mutual funds

    the security market - a casino, at least in China. that's why Chinese use a verb 'fry' for doing stock transactions
     
    Last edited: Oct 24, 2010
  15. SHASH2K2

    SHASH2K2 New Member

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    problem with real estate is that you need huge amount of initial investment. A normal person cannot manage so much money at once so he would still prefer stocks as he can invest gradually.
     
  16. Gurleesingh

    Gurleesingh New Member

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    I think that both investment are better for every investors. If you will start trading with the advice of real estate or ]stock advisory firm. Bcz Both market expert will give you advise that which is right time for investment.
     
    Last edited: May 9, 2013
  17. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    If you have money, go for real estate. This is a no-brainer.
     
  18. SLASH

    SLASH Senior Member Senior Member

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    Investors need to be extra careful when they invest in real estate. Most real estate project are delayed due to court cases and litigations. Many do not finish. Be sure where you are investing and who is the developer.

    Stocks are a better pick. Do some research about the company before you invest. All financial data for all listed companies are available on the net. See their performance of the last five years. Read their annual reports. See whether they have been able to achieve their targets. There are a lot of good companies. And it does not take a lot of money to invest. Invest in IPO's. You will get very few number of shares, but if the company does well you will be get very good returns in a short period of time.
     
  19. Ray

    Ray The Chairman Defence Professionals Moderator

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    All speculation can make one rich quick or make one a pauper.

    Best way out is go for Chit Funds - the fate is decided faster! :rofl:
     

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