I know that over time stocks generally yield a higher return than houses do. So what is a better idea. Paying principal on a house on a loan with 5% interest or investing in the stock market.
Please give me strong reasons why rather than just choosing one of the options
2007-03-28 16:42:41 · 13 answers · asked by danigrrl8 2 in Business & Finance ➔ Investing
Diversified investing has given interest over long term since the stock market opened. Desirable real estate has increased in value over long term since the start of the country. Risky stocks and poor real estate location has either lost all or most value or skyrocketed in value. Their are many, many factors that you need to look at to make a wise decision. If it was me with the $50,000, I would buy real estate/house. The stock market is at a high point and could turn into a bear market at any time. Real estate is in somewhat of a slump and prices are low in most places, depending on where you are, and has great potential to rise in value.
2007-03-28 17:48:58 · answer #1 · answered by beefcake 3 · 0⤊ 0⤋
There are two principals dictates to answer your question. Are much risk can you tolerate? Can you trade (not invest) like a pro in a current stock market enviornment? If you are a risk tolerant and you can trade like a pro by yourself, I would trade stocks (long or short depending on the stocks and environment).
If you are neither, best way to go is to buy a house. House is the safest way to play this game. You will not lose money but return might be less than from stocks. However, housing price has gone down a lot from a year ago.
2007-03-28 16:57:35 · answer #2 · answered by purplemollies 3 · 0⤊ 0⤋
It sounds like you already own a house and are asking about paying down the principal, if this is the case and you don't have much in the way of stocks then I would choose to buy stocks/mutual funds. Mainly for the sake of diversification. I would want to have my wealth spread over a portfolio of real estate, international and domestic stocks and mutual funds. Do you have an IRA for retirement? That would be a priority for me.
2007-03-28 16:57:23 · answer #3 · answered by QandA 3 · 0⤊ 0⤋
if you invest wisely, you can earn an average of 8-12% over a 30 yr period in the stock market. just pay your mortage and use the rest for smart investing.
and by smart investing i mean blue chip companies that are stable, mature and pay a good dividend. companies like ge, pg, bk of america, colgate, etc. invest monthly through the comoanies dividend reinvestment program. at the end of the 30 yr period, you will have a paid off house and a nice stock portfolio.
2007-03-28 16:58:41 · answer #4 · answered by Anonymous · 0⤊ 0⤋
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2007-03-29 00:09:09 · answer #5 · answered by Anonymous · 0⤊ 0⤋
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2016-09-05 19:55:20 · answer #6 · answered by picone 4 · 0⤊ 0⤋
You can easily loose money in the stock market. Houses are rather stable. I would suggest a house. You can also live in a house, you can't live in stocks.
2007-03-28 16:45:41 · answer #7 · answered by ithek_thundervoice 4 · 1⤊ 0⤋
Hi..
It depends on your education and how keen you are to learn and manage your money.
Trading
People who are motivated do well in trading.
Your Mortgage
Good idea to pay it off..money saved is money earned.
Do you want to make more than 5%?
If so you need to invest.
You can trade with very little and learn how to trade by not using any money at all.
The answer depends on how much you want to make. If you want to make more have a look at the resource below.
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2007-03-28 17:17:55 · answer #8 · answered by Joseph Sgro 2 · 0⤊ 0⤋
See it is better you invest with somebody who is ineed to grow his or her business on interest basis this will not only keep your money safe but help the other person also and keep interest rate at 5%.
2007-03-28 20:24:29 · answer #9 · answered by deepali292003 1 · 0⤊ 0⤋
where on the world are you..?
if your city has got good market value, and if you can rent out the house..go for it..you wont lose the capital in real estate..
stocks are good choice too..but as you said..its too risky..
Chris
www.forexaim.com
2007-03-29 03:57:53 · answer #10 · answered by Anonymous · 0⤊ 0⤋