Real Estate vs. High Yield Equities: What's the Better Choice for Investors?

Many investors and economists believe that we have reached a bottom in the housing market. Whether this is the case or not, is it still a good idea to buy investment property as part of your financial portfolio. As a prerequisite, an individual's own home is not a investment (hopefully people have learned this from the current housing bust), rather it is consumption because you are forgoing the returns of rental income to live in the property yourself. There are plenty of other reasons to own a home instead of renting (stability, customization, replacing rent with forced saving, etc.), but capital gains is not one of them. First lets look at the performance of real estate versus the stock market and high yield stocks over the past thirty years:As you can see with the exception of the early 2000's housing boom, housing prices have been flat when adjusted for... Read more