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Stocks are the best investment over the long term

Stocks are the most profitable asset class for investors ready to invest for the long-term.

Investing in stocks, over the long-term and if properly done, is the best way to generate wealth over time and this can be done without taking too much risk (such as using leverage for instance).

In many countries (and this is particularly true in countries such as France, Italy and some Asian countries such as Vietnam) investors think that real estate is the best investment option. In general, savings or risk-free cash investments are their second option. Stocks only rank third which is amazing considering that putting aside the very recent past, stocks have always delivered better returns than real estate over the long term.

Why do more and more people believe that real estate is their best investment option? Well, the answer is quite simple. Investors (or at least the majority of them) have little memories or even worse do not take the time to analysis historical data and trends.

John De Goey wrote a really interesting article on this topic that you can read here.

However what people tend to forget to take into account is the money they invest (or lose) over the years in renovating and maintaining their properties. On the other hand, the same people tend to ignore the benefits from dividends. It is true to say that stocks represent a more volatile type of investment than Real Estate, however it is similarly true to state that stocks offer higher returns over the long-term.

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