Investing Money Into Stocks and Real Estate

Jan 31, 2011 by النابض · 0

By Shaun Rosenberg


It is always a great idea to invest into many different equities in order to diversify. That way if you lose money on one of your investments you will be ok because it is just one part of your investment portfolio, ideally you can still make money if you lose one investment because your loss will be more than made up for with the gains you make from another investment. That is why many financial advisors recommend that you invest into a wide range of different stocks when you invest into the market.

One other thing you can do is to invest into many different markets. Two markets that complement each other are stocks and real estate. Buying a house and renting it out (or buying multiple houses) can work well with investing into the stock market for a few different ways.

The first reason why stocks and real estate work pretty well together is because it gives you exposure to two very powerful markets. What this means is that a negative move in one of these markets affects you a lot less. If the stock market crashes then you will take a hit, and it will suck, but you will still have real estate on the side and hopefully that will help you out.

On the other hand if real estate goes down then you will still have money in the stock market. Both of these markets tend to do very well over time, but just in case things don't work out for one of them it is always a good idea to invest into both markets.

The second advantage to this approach is that each market can fill in where the other market is weak. In real estate you can get a lot of leverage because you can borrow a lot of money to buy a house.

Buying rental properties can give you a huge return simply because you can borrow money to invest into it. The downside of the real estate market, however, is that it is hard to get cash. You may be worth $200,000 on paper, yet still go bankrupt because you cannot afford to pay the mortgage on your houses and it would take many months or years to sell your houses.

Stocks on the other hand are highly liquid. If you are ever in need of money you can always sell your stock and get the money the next day. That makes things easier and can really help out if you are in a bad situation.

Both markets have been shown to produce good returns over time. By investing into both of them you are getting a more diverse portfolio and are putting more of the odds in your favor.




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For more ways to invest money here is an article on Different ways of investing money