Thanks for your input. I’ll put some of this on my list to write about in the near future

Thanks for responding. I certainly agree that there are many venues in this world to make a buck. I was playing a bit of devil’s advocate.

“But most ordinary investors don’t have a clue on how to cover their tails by hedging their investments.”

This is exactly why I thought I’d bring it up. Many people probably read your post and said “wow, the tables are stacked against me in the stock market, so instead I’ll put all of my money into risk-free real estate”. There is always risk when any kind of return is involved. And hopefully you and I did a bit of educating on both sides of the coin…

Great job, keep ‘blogging!

Thanks for you comment.

“This does happen every day. Look into the options market. You have 1:100 leverage. A small amount of money can control a huge amount of stock. (With a huge amount of risk of course…)”

I appreciate your point of view and I understand exactly where you’re coming from. I understand options. I play with them a little and I have a partner that trades them extensively. There is a lot of money to be made in options, however, like you said, the risk can be tremendous. I am looking at real estate as a much safer way to achieve the same goal.

“Again, look into the derivates game. Options are specifically intended to provide insurance on stock. Read up on covered calls, collars, etc…”

All very true. But most ordinary investors don’t have a clue on how to cover their tails by hedging their investments. But, you are right that there are ways to insure your equity investments.

“I certainly would trust my financial future with the Vanguards of this world over a realtor in a slick red jacket trying to make 6% and his end-of-month quota anyday.”

Haha, I guess a lot of Realtors are viewed just above a used car salesman. (And I know several Realtors that fit the stereotype very well) But this is what I am talking about in finding a good Realtor. For instance in my firm, when an investor purchases a property, we are generally the ones who manage it. There is some accountability there. If we sell him crap then we have to manage the crap. If we can’t make it work, then its back on us. We have a vested interest in really helping investors instead of trying to make a quick buck and sending them out the door.

My point isn’t that you can’t make money in other places; my point is that real estate is generally a safer way to achieve the same goal.

“What would your stock broker say if you brought him $10,000 and wanted to buy $100,000 in Google. Even with an aggressive margin account, that would never be happen!”

This does happen every day. Look into the options market. You have 1:100 leverage. A small amount of money can control a huge amount of stock. (With a huge amount of risk of course…)

“Try getting insurance on your stock portfolio. It will never happen because insurance companies know that real estate is a much safer investment.”

Again, look into the derivates game. Options are specifically intended to provide insurance on stock. Read up on covered calls, collars, etc…

“When trying to make money in the stock market, you need to understand technical and fundamental analysis techniques….”

Or, you could go out and buy a low-cost index fund from a large investor-owned shop like vanguard. You don’t need to understand any of the above to understand that stocks go up in the long-term and buy into the market. I certainly would trust my financial future with the Vanguards of this world over a realtor in a slick red jacket trying to make 6% and his end-of-month quota anyday.