The Market vs. Real Estate: Why It’s Time to Rethink Where You Park Your Wealth

Have you been watching the market lately? If you’re like most Americans with a 401(k), IRA, or brokerage account, chances are you’ve felt the sting of volatility. Between inflation, economic uncertainty, geopolitical instability, and policy whiplash from changing administrations, the stock market has become a rollercoaster ride that most can’t afford to stay on, especially those approaching retirement.

In the past 60 days, the stock market has experienced significant turbulence:

These events highlight the market’s volatility and the challenges investors face in such an unpredictable environment.

Meanwhile, real estate keeps doing what it has always done: grow in value, generate income, and offer powerful tax advantages. The average American may not have the time, knowledge, or risk tolerance to master the stock market, but we all understand real estate.  Why? Because we live it.

It is a lived experience.  Not a sales pitch about possible benefits and future returns.

Real estate has demonstrated consistent growth and offers several real advantages:

Also, you have to ask yourself, especially given your financial position and life situation, is it worth the risk?  Let’s look at the numbers.

While the stock market has seen big swings—both up and down—real estate appreciation has remained positive and consistent, even during downturns. But that’s just the beginning of the story.  Let me go deeper on the benefits.

Even if the returns were the same (they’re not), real estate would still win because of the following advantages:

With real estate, a first-time buyer can control a $500,000 asset with as little as 3% down. That’s $15,000 controlling an appreciating half-million-dollar asset. In contrast, $15,000 in the stock market gets you… $15,000 in the stock market.

Homeowners can deduct the interest on their mortgage from their taxable income—lowering their tax bill significantly. You can’t do that with stocks.

Stock market gains are taxed when sold. Real estate gains are tax-deferred until the sale—and even then, a 1031 exchange allows you to defer taxes further by reinvesting into another property.

Clarification: You cannot write off capital gains tax in the stock market the way you can offset income in real estate. Capital gains tax is owed upon sale unless you’re selling in a tax-advantaged account (like a Roth IRA). Otherwise, it’s a direct hit.

Homeowners can borrow against their property through a HELOC or cash-out refinance—often at lower rates than securities-backed loans. Stocks? To access the money, you have to sell—and trigger taxes.

You can live in your investment. That means housing cost savings plus the ability to write off taxes, mortgage interest, and certain maintenance costs. Try doing that with Tesla stock.

For investment properties, real estate delivers a second stream of returns: cash flow. You benefit from appreciation and monthly rent. With proper management, tenants pay your mortgage while you build wealth.

Stocks can go to zero. Companies go bankrupt. A home? It may burn down or flood, but insurance rebuilds it. Real estate is permanent. It’s a shelter. It’s land. It’s the ground under your feet.

Don’t let stock market millionaires fool you, they are the exception, not the rule. According to IRS and Census data:

And yet, Wall Street keeps preaching a gospel that most Americans can’t afford to follow or believe in.

My Recommendation.  Move Your Money Now, While You Still Can.  Look again at the headline news.

These aren’t hypothetical. These are the headlines. This is your portfolio we’re talking about:

These events underscore the intense volatility of the market. If you’re in your 50s or 60s—or even late 40s—and nearing retirement, you must ask yourself: is this where your money belongs?

Let’s get into what to do about it…

If your market losses are in the 10% range, consider that a win exiting now—before they grow deeper.  Now I know you don’t lose until you sale, but this is not about timing the market.  This is about being in the market in the first place at this time in your life.  Convert your 401(k) or IRA into a self-directed account and invest in real estate. Yes, you may pay some fees. Yes, there are rules. But yes, you will be securing your financial future with something you can live in, rent out, improve, and pass down.

You were born in real estate.
You grew up in real estate.
You work in real estate.
You’ll be buried in real estate.

So why is your money not in real estate? Here are some common objections I hear:

Consider starting with a smaller property, 4-unit property and live in one of the 4 units or partnering with your family and friends to purchase a home or investment.  Consider buying an investment property in states where homes are very inexpensive.  I published a HUD Homes magazine that is full of great deals in California.  There are also financing options and programs for first-time buyers.  You can start a syndication or Go fund me with family and families.  You own what you manifest.  Remember that.

While stocks can offer high returns, they come with higher volatility. Real estate provides more stable, long-term growth with additional benefits like rental income and tax advantages.  Also, no none should have money in the market they cannot afford to lose.  Full Stop.  That is everyone.  If you are in the market, you need to take out what you can’t afford to lose now.  The market is a rich man’s game who has discretionary funds they can afford to lose.  So are retirement accounts.   If you do not have an emergency fund of 12 months of your income you should not be invested in any investment account of any type.  Not even a 401k.  What happens if you need the money?  Need I say more.  It’s like owning a gun and keeping it safe instead of carrying it.  You will not have access to it when you need it the most.

Property management companies can handle day-to-day operations, allowing you to enjoy the benefits without the hassles.  In addition, you do not know the landlord laws and requirements. Leave it to the professionals or you risk fines, loss of rent and maybe even the loss of your property.

Given the recent market volatility, it’s prudent to consider diversifying your investments. Real estate offers stability, tangible assets, and multiple income streams.

If you’re interested in exploring real estate investment opportunities, feel free to reach out for guidance tailored to your financial goals.  If you are a seasoned homeowner or investor sitting on a bunch money this blog is not for you.    Ride the market out.  You can afford the risk.   You are a 1% percenter.  Congratulations.  But for the rest of you, heed my advice.  Get out now if you can.

It’s time to stop hoping your retirement grows while riding the waves of the market. Take control. Build equity. Build multiply streams of rental income. Reclaim control of your future.

If you need help making the transition, I can guide you through it.

Eric Lawrence Frazier, MBA
Your trusted advisor in business and wealth
www.ericfrazier-com-869976.hostingersite.com | www.thepowerisnow.com
NMLS #451807 | CA DRE #01143484
Schedule a consultation: https://calendly.com/ericfrazier/real-estate-mortgage-consultation-clients