Published April 25, 2024.
Written by Reno Perry.

Tangible vs. Intangible Assets

• Real estate offers tangible assets – physical properties providing stability and security.

• Stocks represent ownership in companies, offering potential for high returns but also subject to market volatility.

Historical Performance

• Los Angeles County sales prices from the end of 1990 to the end of 2022 indicate an appreciation rate of 275.69%. That averages to an 8.62% increase per year over the last 32 years [Source: National Association of Realtors].

• The stock market has also experienced growth but is subject to volatility, influenced by economic conditions and global events.

Diversification and Risk Management

• Real estate allows diversification through owning properties of different types and in various locations.

• Rental income and property appreciation serve as a hedge against inflation and help mitigate risk.

• Stocks offer diversification through investments in different sectors, but fluctuations can impact the portfolio's overall performance.

Liquidity and Accessibility

• Real estate transactions have longer timelines but offer opportunities for long-term wealth accumulation.

• The stock market provides high liquidity, with easy access through online platforms.

• Accessibility can lead to impulsive decision-making in the stock market, while real estate requires careful consideration.

In conclusion, both stocks and real estate have pros and cons for investors in Southern California. It's crucial to understand your financial goals and risk tolerance when deciding where to invest. Whether you choose real estate, stocks, or a combination of both, diversification and professional guidance are key to success. If you have questions or need assistance with your investment journey, feel free to reach out — our team of seasoned real estate agents have been advising Southern California clients since 1978.