Investing a portion of income in right avenue has always been a tough task and people often are clueless whether they should invest in the stock markets or real estate.
Making money on stock market for one who has no trading experience might not be easy as virtual trading ups and downs are very quick. Making an investment in wrong stocks can make an investor poorer. On the other hand, in India people prefer real estate as it gives a feel of ownership and they understand the valuation of physical assets better than stocks.
In terms of return, stock can give an investor better return, however, investing on the stock market without understanding fair valuation of the stocks can be risky.
Ace investor Warren Buffet said never invest in business or stock that you do not understand. Therefore, both have their advantages and disadvantages, and there are several aspects that make them unique investments in their own way.
Investing in stocks
The profit margin inherent in stock investment has always been higher when compared to other asset classes and investments offer liquidity and flexibility which real estate can’t offer.
Investing in real estate
Unlike stocks, real estate is a tangible asset that gives greater psychological comfort, security and satisfaction. While the stock markets are far less predictable, the return on investment in real estate is reasonably consistent.
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