Warren Buffett: There Are More Opportunities in the Stock Market Than Real Estate

Earlier this month, Jackie Han, an attendee at Berkshire Hathaway’s annual shareholders meeting, stood up to ask Chairman and CEO Warren Buffett a question.

“As you might imagine, we come from a Chinese family, and we’ve always had a special place in real estate,” Han said.

Han was determined to get the opinion of the world’s most famous long-term investor. “Why do you still buy stocks instead of more real estate?” she asked Buffett, the New York Stock Exchange’s most famous investor. “Buffett has said there are far more opportunities, at least in the United States, in the stock market than in real estate.”

Many Americans feel the same way. Every year, Gallup conducts a survey in the United States about the preferred investment for long-term returns, and for 12 consecutive years, real estate has been the most popular answer. This year, 37% of those surveyed selected real estate as their top choice, compared to just 16% who chose stocks. The stock market’s performance over the past four decades supports Buffett’s argument.

Since the beginning of 1988, the Case-Shiller National Home Price Index, which measures residential property values, has risen 374%. During the same period, the Standard & Poor’s 500 Index, a benchmark for the overall US stock market, has risen 2,218%. Adding reinvested dividends brings the total return to 5,006%.