First of all this thread is for moderately successful traders or lower, because if you're making 150k+ in the market your answer is obvious.To the rest of you guys, why did you pursue stock trading (or futures or forex etc) instead of real estate? I ask this question for a few reasons: 1. It seems all the people I know of who are well off have obtained their wealth through real estate or a business. 2. Because of reason 1, I don't know anyone who built their wealth off the markets. This is supoorted by the well known fact that the large majority of traders (+90%) are net losers. So why do you guys do it? It seems going the trading route is foolish when you look at the real estate market and the endless amounts of wealth it churns out to savvy investors. Your thoughts are appreciated. Ashan
Like everything else, real estate also has its cycles. There are years (and you never know in advance) when you WISH you did not own ANY real estate. Just lately, many got lucky with such an extended cycle. Been there done that, through different periods. Sometimes property won't go up for 5 YEARS or more! Other times it may take you 3 months to rent out a nice, NEW 3 bd, 2 ba house. I've also seen people own property (even in California!) for 7 years and not make a penny (they lost money, in fact).
I'm not a trader but I would like to make a comment or two..I have acquired my wealth neither through the market or through real estate..but with that said, I think the reason more people trade than have chosen real estate is simply the fact that it takes a lot less money to start trading....( not taking into consideration the real estate frenzy of the last 2 years).....I know of a number of people who years ago invested in raw land where they thought 20 years down the road would be all commercial..and in most cases, they were correct but they had to put the money up for that land as well as pay taxes on it for all those years...Unlike trading where anyone can start with just a little bit of money.
I would make money in ANYTHING that provides me with the best risk/reward/ OPPORTUNITY/ TIME ratio. I invest in real estate, but did not invest in anything new this past year, the RISK is too large, the REWARD is too little, and I'm not putting up big deals like developing whole buildings, I'm just doing the little stuff such as basic rental, flipping. I find the REWARD from the markets if you get it RIGHT will make you a LOT more money then my other CURRENT opportunties. When you can go into the markets, 15 minutes, buy 50 contracts and make $2-3k in maybe 15 minutes. And do this maybe 2-3 tims a day. Thats good opportunity. Of course to do this you need the skills to spot these opportunities, so thats where the investment of time/research comes in.
You can't sell the real estate market short, or if you can, please tell me how I can. I need a hedge, so I'm open to ideas. Success, CB
I'm not much into market traded funds, but I think it should somehow be possible to hedge by shorting REITs or a related index.
I own real estate and work for a development firm. I prefer real estate over trading but there is no reason why someone can't do both.
First of all, trading is a BUSINESS. Hence, it should have a high failure rate. I read a survey about two years ago. Over 70% the small business in US folded within the first two years. Over 80% of them went under within the first five years. Secondly, nothing is easy. In this cruel world, there must be more losers(much more to be exact) than winners. If everyone just need to put their money into real estate, and become millionaires, no one will work at the restaurants or supermarkets. A lot of people will starve to death. Similarly, for every Warren Buffett, thousands of people may have lost their life long savings in the stock market. During the technology bubble, many friends of mine complained that they should have put all their money into the stock market, instead of the property market. I guess the sentiment has changed now. When the US housing market suffered a downturn in early 1990's, Donald Trump almost went under. The property market in Hong Kong is another example. Everything has its cycles.................. http://www.elitetrader.com/vb/showthread.php?s=&postid=651100&highlight=brandy#post651100
AshanD In my case I felt I needed something I could do as I got older and did not have the physical strength to maintain real estate property. The stock market would allow me action from a wheel chair or with only one eye or one hand... etc Can't happen to you ? Just take a look around at your local hospital emergency room where all kinds of crippled people suddenly find themselves. ( This applies to those of us who aren't afraid of physical work required to maintain real estate property) The market also allows profits from a major 1929 style decline if you teach yourself it's OK to go short. I have more than 20 years dealing with 30+ real estate properties. I also have been very active in the market since 1987. Real estate made me more $ but I enjoy watching the market a bit more now as I got older.. and into retirement. agpilot