Investing: Real Estate v. Stock Market

Cover of "Fat Cats"
Cover of Fat Cats

The stock market is coming back, we’ve noticed, as all media are trumpeting. It’s still a hundred points below where I finally bailed out last September at  30% down, but, hey, who’s counting? This return of value to stocks must mean it’s now a good time to invest there, right?

For me, I’ve decided to forego the stock market completely. My investments were strictly in mutual funds and only because of the tax rules for deducting. Because I didn’t unerstand how the stock market worked as I have no idea about puts and calls and price/earnings ratio and all that, I just trusted Vanguard to take care of my money. Which they did, for quite awhile, but even Vanguard couldn’t have foreseen the drastic decline in the market.

Like many today,  the chaos of the unrestrained markets has led me to believe, cynically, that the stock market is really a big  lottery and all the odds are set against me and all the other little investors that are just trying to make a few bucks. Obviously, even the Big Boys, the Wizards of Wall Street, didn’t get it either as so many have plunged, dying and gasping, from their vertiginous financial heights.

When I look at the recent rallies on the Street, it just looks to me like a few Fat Cats dancing around with my money. After all, Wall Street, unlike the rest of us proletarian worker bees, has the assurance of the full faith and support of the U.S. Government. They’ve got our dough and the promise of all they need, so why not start climbing all over again?

But, once burned, twice shy. I’ll never go back.  I am looking for alternative investments. For me, real estate is the place I will put my few shekels. That’s a place I understand and where I have already made a few bucks.  Investing in real estate can be complicated, too, but at its core, it’s simple. There are just a few things to keep in mind: Buy low and sell high, location and location,  look for cash flow

What I like best about real estate is that it’s concrete. If I buy a property, I can go look at it. It’s right out there. It’s not some electronic bleep.  And, I can improve it myself. If I wanted [I don’t want], I could actually paint it or put up new drywall or add tile or whatever I want to increase its value and its attractiveness. It’s under my control. Being a control freak , that’s very important to me. What I do with the property is up to me, not to some suit on the Street.

I like it.

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