FreeMoneyFinance comments on an article by Ben Stein that looks at the relative returns of real estate to stocks. Short version: stocks have done better historically than real estate but it is really hard to live in a stock.
"There are long periods when the stock market doesn't make you much money.
The S&P is still lower than it was seven years ago. Stocks adjusted for
inflation lost about 80 percent of their value in the slump of the 1970s and
part of the 1980s. So nothing is a slam dunk.
Professor Robert Shiller of Yale has demonstrated, however, that over very long periods homes barely keep pace with inflation. Stocks, over very long periods, beat inflation by a large margin. (Please remember that "over very long periods" part."
Freakonomics comments on Cheating in NASCAR (which definitely has finance ties, but I would suggest it is too early to make much of a claim yet), Lenny Dykstra's new investment advice, and a look back to the VERY early days of Google.
The MarginalRevolution has a cool look at yesterday's NY Times piece on Niger. Short version? Increasing property rights has lessened the "problem of the commons" and tree owners are now protecting their trees, which in turn is helping the nation beat back the desert.
CyberLibris announced the starting of Vox Academia a new spot for academic conversations across a broad range of Business topics.
KimSnider has a podcast that covers a fact that many overlook: even if they want to work past 65 years old, they may not be able to do so. Financially, the solution is to save more now!
and finally (I am out of time), Cafe Hayek has a very cool definition of economics! (I love it!!! and agree):
"...economics is the study of how to get the most out of life....To get the most
out of life, to think like an economist, you have to be know what you're giving
up in order to get something else."
Great stuff all!
1 comment:
On average, stocks do outperform real estate, but looking at it on average is misleading. In the country, leverage is negative and real estate is not even an investment. In the city, leverage is neutral and one can only expect the return of bonds. In the metropolis, leverage is positive and can be made arbitrarily so. It can and does outperform stocks, but with these returns also come the fluctuations of equities.
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