Real estate beats gold and stocks as a long term investment at this point in history. There have been other times when that was reversed, but I believe gold and stocks are far less secure and far more risky than real estate right now. Here’s an interesting picture. In August of 2011 Gold was $1,889 per ounce, and now in December of 2014 gold is about $1,200 per ounce. That’s a 36% loss. During this entire steady downturn in the price of gold over the last three years, the gold peddlers have not stopped pitching gold every day. “Buy, buy, buy,” they keep saying. Do they have any credibility left? I think not. I shared a version of this chart in 2011 arguing at the time that real estate beats gold and stocks. Wow! If you had shorted gold and bought real estate, you would have made a lot of money. In many areas around the country real estate has increased by 36%.

Gold and Stocks

Gold and Stocks v. Real Estate

Whether real estate beats gold and stocks at any point in time depends on many variables, but in Sequim, Washington real estate prices have not increased significantly like they have in many parts of the country. Rural areas tend to lag behind the economy of larger metropolitan areas, and that is true with Sequim and Port Angeles. I believe real estate prices are poised to begin to increase in Sequim over the next year and will steadily appreciate beyond that at a slow rate. 

Gold and Stocks Unstable

Real estate as an investment, whether that is your retirement home or rental homes, is far more secure than gold and stocks. While the “experts” (or gold peddlers) have been telling you that you should buy gold while it continues to fall for the last three years, the stock market has been up and down like a roller coaster. The traditional “buy and hold” strategy for retirement planning has been a disaster for many over the past seven years, and for many periods of time throughout history.

The volatility of investing in gold and stocks is crazy. If you have money to invest, I recommend a solid and secure long term investment that can never go “poof” on you. I believe single family homes are a very good investment right now in the Sequim and Port Angeles area, far more secure than gold and stocks.

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