Stocks vs Bonds vs Real Estate

by Anonymous

Stocks, bonds, and real estate form the three pillars of traditional investing. Each asset class behaves differently across economic cycles, making diversification across all three a cornerstone of portfolio construction. Stocks offer the highest long-term returns with the most volatility, bonds provide stability and income, and real estate offers inflation protection with tangible asset backing.

Stocks

~10% (S&P 500)
historical annual return
High (30%+ drawdowns)
volatility
Dividends (1–3%)
income type
Very high (instant)
liquidity
$1 (fractional shares)
minimum investment
Good (long-term)
inflation protection

Bonds

~5% (US Aggregate)
historical annual return
Low to moderate
volatility
Interest (3–6%)
income type
High
liquidity
$100 (Treasuries)
minimum investment
Poor (except TIPS)
inflation protection

Real Estate

~8% (including income)
historical annual return
Moderate
volatility
Rental income (4–8%)
income type
Low (months to sell)
liquidity
$10K+ (or REITs from $10)
minimum investment
Excellent
inflation protection

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