How do stocks compare to property as an alternative investment? - 03/06/22

There are countless different methods to investing money with the hope of a reliable, safe environment for a good ROI. One way that has been seemingly reliable over the years and saw a great deal of attention in 2021 is the global stock market.

There are countless different methods to investing money with the hope of a reliable, safe environment for a good ROI. One way that has been seemingly reliable over the years and saw a great deal of attention in 2021 is the global stock market.

Influence from stocks such as $GME and $AMC brings a wave of new investors to the markets. Stock investments such as the blue-chip S&P 500 can provide great annual returns historically. Since 1926 the annual return has been between 10 and 11%.

Stocks also give you the ability to compound your returns. For example, if you invested just $100 in S&P 500 when it began in 1926, it would now be worth $855,999 in 2021.

There are some significant issues and potential pitfalls when investing in stocks and shares. Individual stocks can be much more volatile, bringing the potential for extreme shifts in value. This, in turn, can net a positive return of a higher percentage in some circumstances but can also lead to huge losses.

A great example is the current Russia-Ukrainian conflict, which saw a market-wide pullback. Even the S&P 500 and London stock markets suffered their most significant weekly loss since the impact of COVID-19 in early March 2020. This further illustrates the unpredictable nature of stocks that can sometimes wipe away gains made over prolonged periods of days or weeks.

Therefore, investments such as property will always be a much safer choice, giving the investor a clockwork income. Property, unlike stocks, provides the investor with a tangible asset that isn’t simply a number sitting at the bottom of a balance sheet.

On top of this, property investments can deliver good capital appreciation when purchasing in the best locations, such as Manchester and Liverpool in the United Kingdom. With local solid rental demand and a short product supply, these locations will likely deliver a stable return in any given economic condition.

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