Low interest rates in advanced countries have pushed money into real estate

Re:Low interest rates in advanced countries have pushed mone... by PragmaticPulp on Wednesday November 24, 2021 @04:35PM (#29335456)

> Right now, investing in public companies and tech is very risky, as valuations are at record highs. Many experts estimate near-zero returns for decades from public markets. And, as a small-time investor, I don't have access to private deals or markets.

> So, that leaves real estate.

That’s a huge leap to jump to real estate as somehow safer than public market investing. Real Estate can also be highly volatile and is also prone to significant drawdowns.

Real Estate also has very high carrying costs relative to other investments. Especially if you’re trying to rent it out, at which point it becomes a business with not insignificant labor requirements, either from you or someone you hire. It’s more of a side job than an investment.

If you’re serious about investing, you shouldn’t be choosing between a bank account or real estate. Those are on opposite ends of the risk spectrum and opposite ends of the work-required spectrum.

Instead, you’d want to do things like dollar cost averaging into equities over time (nobody really invests by keeping it all in cash and then flipping it all into specific stocks in the middle of a frothy market). Or you should be looking into ladder if CDs, or bonds, or something like I-bonds to invest an asset specifically indexed to inflation.

But choosing between a 0% bank account or real estate investing is a major false dichotomy.

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Re:Low interest rates in advanced countries have pushed mone... by carom on Wednesday November 24, 2021 @10:32PM (#29337978)

>But choosing between a 0% bank account or real estate investing is a major false dichotomy.

Ok, so interest rates are near zero. A ton of money is leaving the bond market and going to stocks. Price of stocks is being pushed up due to the increase in money chasing yield there. These companies didn't get more valuable, your earnings per share just went down. Now you're anticipating inflation as printing money is a great way to get out of the next crisis when your interest rate can't get any lower. This personally leads me to real estate.

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Re:Low interest rates in advanced countries have pushed mone... by phreeza on Thursday November 25, 2021 @02:28AM (#29339027)

Not sure if this is what the parent was talking about, but the risk equation changes significantly for real estate that you own to live in it, both because of government incentives and because you can always derive value from the asset through living in it, regardless of what happens to the resale value.

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