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Catholic Investing - learning - 07-29-2009

When I left my job to have my baby I rolled over my 401k and invested some in a S&P 500 Index.  A few months later I heard about Ave Maria Catholic mutual funds and invested some more in 3 of those funds.  Soon after the market tanked and all my investments when down.

I lost faith in the stock market and started thinking more it. The stock market seems to me it is not a very healthy thing for our society.  When I looked more closely to see what companies the Ave Marie funds hold I didn't even like those.  For example, one fund holds Kellog's, but I think their terrible cereals are a horrible convenience food that put kids on a sugar high and rots out the teeth.

So I am wanting opinions on the morality of investing, what others Catholicas are doing.  Do I sell at a loss to get out if it's wrong?


Re: Catholic Investing - veritatem_dilexisti - 07-29-2009

Kellogg's doesn't force-feed children … :P

Regarding your query, I think it not immoral to invest in the stock market but, based on what my father has told me, unwise; indeed, few can boast of a profit from such investment. Stick to property and a high-interest bank account. :)


Re: Catholic Investing - epalinurus - 07-29-2009

My problem with the socially responsible Catholic investment companies (the non Catholic ones are normally whackos who base their decisions re inclusion at least in part on liberal political standards) is that at least some of them consider investment in US firearm manufacturing companies an inappropriate investment, not consistent with the character as socially responsible  investing.  This, of course, is transparent nonsense, since making a shotgun is no more immoral than making a can opener, and a lot more moral than making, say, RU 486.

I won't mention any specific Catholic investment company, because I don't recall for certain which ones I wrote to, but the ones I heard from gave me a mushy answer along the lines of, "well, we're not saying it's inappropriate to invest in them, and we have in the past, but we don't now, and we're not sure....blah blah blah."  If you care about a specific type company, ie, wonder if it's included, I'd urge you to write them.

edited to correct typo


Re: Catholic Investing - DrBombay - 07-29-2009

Sorry, but there's no such thing as a high interest bank account.  :(

The stock market has a 70+ year history of profits.  Invest, don't panic and don't listen to the tin foil hat crowd that tell you to horde gold coins.  If society collapses, food and water will be far more valuable than gold.

Property is also a good investment but the key is don't put all your eggs in one basket.  Unless one wants to live in a cave and eat dirt, one is already contributing to immorality at least indirectly just by being part of day to day life.  Even the computer one is reading this forum on was probably produced by a homo-loving, abortion supporting multi-national conglomo.  Just sayin.


Re: Catholic Investing - James02 - 07-30-2009

Market is looking toppy.  I think we get a pull back, and then one more blow off top, maybe to 1050.  Maybe we get a nice spike if Obama care is declared dead, or the Cap and Tax plan gets declared dead.    After that, there is a serious probability of the bear market firing up again and making new lows.  That means if you buy here, you could lose half of your investment real quick.

NONE of the problems have been fixed.  And the wipe out in commercial real estate is just getting started.  Unemployment will continue to rise.  And the U.S. is one of the last places in the world  anyone would want to commit capital and investing.  We have declared war on capital and capital is leaving.

I will be looking to short again in a few weeks.  Be very cautious in stocks right now.  You got lucky and enjoyed a great dead cat bounce from 666 up to where we are now.  For the next few years, be defensive.  Don't take risks in this market.

As for gold, don't know.  I can easily seeing it drop once the deflation resumes.  Long term, it is a buy, but I'm holding off on buying any right now.  Good luck, it is a treachorous market.


Re: Catholic Investing - ggreg - 07-30-2009

(07-29-2009, 08:24 PM)DrBombay Wrote: Sorry, but there's no such thing as a high interest bank account.   :(

The stock market has a 70+ year history of profits.  Invest, don't panic and don't listen to the tin foil hat crowd that tell you to horde gold coins.  If society collapses, food and water will be far more valuable than gold.

Property is also a good investment but the key is don't put all your eggs in one basket.  Unless one wants to live in a cave and eat dirt, one is already contributing to immorality at least indirectly just by being part of day to day life.  Even the computer one is reading this forum on was probably produced by a homo-loving, abortion supporting multi-national conglomo.  Just sayin.

I stole my computer from work.  Looks like it was the lesser of two evils. ;)


Re: Catholic Investing - Iuvenalis - 07-30-2009

(07-29-2009, 05:37 PM)learning Wrote: When I left my job to have my baby I rolled over my 401k and invested some in a S&P 500 Index.  A few months later I heard about Ave Maria Catholic mutual funds and invested some more in 3 of those funds.  Soon after the market tanked and all my investments when down.
The 'stock market' in your case disproportionately large caps (S&P 500) probably recovered a bit for you, to 'only' be down by maybe a third (33%)? That's not peanuts, but your time horizon should be at least 10 years to invest in an index and hold. So, if you weren't prepared for the jitters, or needed the money for other things, the stock market is certainly not where you should have put it. I'm assuming you've heard this already, but it bears repeating. *If* one if going to be in the market, and doesn't want to dedicate pretty significant time to picking individual stocks and uses index as you've described, realistically 10 years-ish is the timeframe. Can you handle such rides? If not, you might want to consider taking yourself out of the market, especially if the S&P 500 approaches 1500 (*if*) and possibly >1000.

(07-29-2009, 05:37 PM)learning Wrote: I lost faith in the stock market and started thinking more it.
It's not for everyone, however, it's 'sold' as though it is. It's not. Many/most cannot handle it. I have too many aunts and uncles that did exactly what you're not supposed to do, they bought high, and when the market tanked, they sold low. This is exactly how you lose money, not make it.

(07-29-2009, 05:37 PM)learning Wrote: The stock market seems to me it is not a very healthy thing for our society. 
Agreed. Not to say I own no stock, but I agree in principle. It's nonsense that proponents claim it raises capital for companies in any way. One the stock is sold, the company has their cash. Ever transaction thereafter is speculation and serves zero purpose for the company that issued said stock-- but I digress.

(07-29-2009, 05:37 PM)learning Wrote: When I looked more closely to see what companies the Ave Marie funds hold I didn't even like those.  For example, one fund holds Kellog's, but I think their terrible cereals are a horrible convenience food that put kids on a sugar high and rots out the teeth.
Corn flakes aren't so sugary, and besides, no one makes the kids eat them, nor makes their parents buy it.

(07-29-2009, 05:37 PM)learning Wrote: So I am wanting opinions on the morality of investing, what others Catholicas are doing.  Do I sell at a loss to get out if it's wrong?
These are two different questions actually. The short answer, I'm not sure what's 'immoral' about owning stock, unless it's a company that does stem cell research, or something glaringly un-Catholic. However, with the modern namby-pamby social justice crap these days, it would be hard to draw a line anywhere and call it based on magisterial teaching. I mean, does Dole oppress poor 3rd world fruit-pickers? Fruit-pickers say yes, Dole says no. There's a lot of stories out there about hundreds of companies. You'd probably be able to justify not buying any stock in any company for some reason or other if you tried hard enough. However, we shouldn't be flippant of course.

Now, I think Ave Maria is a bit of a scam. The fees and returns are no better than any fund out there that I'm aware of, and as you've noticed, they are selling an 'interpretation' of what is 'Catholic investing'-- according to them. Case in point, you've already found something you're uneasy with.

Now as for selling at a loss because of all this, I'd say that's unnecessary. You already own them, done is done. Odds are you bought the shares through a brokerage that already owned them anyway, so they were on the secondary market already. That company already got their cash. Your brokerage just carved you a piece out of their pool. Actually, they don't even put them in your name, they're ultimately kept in the brokerages name since you could sell them any time you wish then they just reallocate them to another customer who buys, etc. -- but I digress.

Point is on this, details aside, 'damage' is done as far as investing in 'immorality' (according to you), don't sell at a loss just because of that. You should of thought of that at the high point, and you still can (if you wait).

You should strongly consider if you have the temperament (stomach) for stock investing, I think most people should reconsider this based on what I've seen (as I said, a shocking number of people panic-selling low).

On that note though, what are your alternatives? There is no such thing as a 'high interest bank account' right now. Feel free to look around. Someone apparently doesn't know how the interest rates that banks pay on deposits are determined. With a key Fed rate being what it is, there's no way you're going to see 'high interest' checking, savings, or CDs anytime soon. Taking inflation into account, you never really have seen very good rates in oh...darn near 30 years now, the Volcker era.

Gold has historically not been a good investment. Key word: historically. If you're investing for the long haul (which a 401k ostensibly is) then gold has usually not done well. This may change, I don't have a crystal ball, but don't let anyone tell you they do know what is going to happen.

Bonds, well, bonds are interesting. They're 'fixed,' but what sort? I-bonds? Gov't bonds? Corporate? What rate you want? What risk you want? You trust the ratings agencies? I'm not expecting answers to these, but just bringing up that bonds (or gold) are no magic bullet.

The property suggestion, especially the certainty with which it was stated, is pretty hilarious. Trust no one that prognosticates. They don't know any more than you or I know about the future (which is zilch). Whatever happens with 'property' (what kind? residential? commercial? residence? rental?), there is one thing for sure, the proponents of property as the 'magic bullet' almost always neglect transaction costs. They nearly always understate maintenance. So, they bought a house for 400K, put 50K of work into it, and sold it for 500K. They'd say 100K profit, or at least 50K. They neglect that they paid taxes, they paid an agent a percent of the total sale (not just the profit!!) etc. Their profit is <50K, even with a tax break thrown in. Take into account the costs of money (interest) since nearly everyone purchases property with leverage (a loan) and then divide it by the time (the always understated cost) and property is not magical.

Take this example and say this happened over 5 years. They made 40K (50K - 10K closing and agent, and this would be cheap!! = 40K) and neglecting a half a dozen other costs, 40K/5years = 8K/year. They had to put 20% down (even if they didn't, but let's say they did) their return on cash (since they bought with leverage) is 20% of 400k = 80K down payment, they made 8K/year, the return on cash, neglecting everything (like taxes, insurance, other maintenance I didn't mention) is 10%. Taking into account the money isn't free (you pay interest, even after a deduction) and taxes, then inflation this is absolutely no better than the stock market at 7-8% after inflation historically. However, the real estate transaction was much, much less liquid.

Bottom line, transaction costs are huge in the real estate market. And it's worth noting that the real estate market is just that: a market! It fluctuates, it does badly, it does well. Don't think there's any easy investment.

(07-30-2009, 01:47 AM)James02 Wrote: Market is looking toppy. I think we get a pull back, and then one more blow off top, maybe to 1050.  Maybe we get a nice spike if Obama care is declared dead, or the Cap and Tax plan gets declared dead.    After that, there is a serious probability of the bear market firing up again and making new lows.  That means if you buy here, you could lose half of your investment real quick.
This is the sort of prognostication I'm talking about. He doesn't know what will happen. He's making educated guesses at best, and rambling nonsensically at worst. This sort of talk with numbers and terms thrown in passes for 'real' information, when it's just complete and total guessing. Of everything I said above for example, notice I was using historical numbers. Historical returns are meaningless as far as the future goes. What happened yesterday was then, this is now. Part of what he said is somewhat true, in the sense that the markets react like the bunch of tea-leaf readers that they are e.g. if Obama's healthcare plan fails, there'll probably be a little bounce to the market. Sure, why not? Again, no one knows.

We do have a pretty good idea what will happen over 10+ years though, and that's how you should invest. You don't know what will happen over 10 years though (neither do I), so if you don't know if you'll need that money, or don't have enough savings/cash, you should think about whether you should have that money in the stock market.


(07-30-2009, 01:47 AM)James02 Wrote: NONE of the problems have been fixed. 
This is fair.


(07-30-2009, 01:47 AM)James02 Wrote: Unemployment will continue to rise. 
As a lagging indicator would do, even if there were a recovery underway--and I have no idea if there is anymore than you know there isn't.

(07-30-2009, 01:47 AM)James02 Wrote: And the U.S. is one of the last places in the world  anyone would want to commit capital and investing. 
Umm...why hasn't the interest we have to pay on our gov't debt gone up then?

(07-30-2009, 01:47 AM)James02 Wrote: We have declared war on capital and capital is leaving.
Eh, not quite yet. Calm down.


(07-30-2009, 01:47 AM)James02 Wrote: As for gold, don't know.  I can easily seeing it drop once the deflation resumes. 
None of the spreads look like near-term deflation on the horizon. Why do you expect this as a possibility? Just because of liquidity increases recently? That alone doesn't do it. You know that.

(07-30-2009, 01:47 AM)James02 Wrote: Long term, it is a buy,
We can't even be sure of this. P/E is backward looking, and we have no reason to believe that future earnings will render the current price a 'discount' if you buy now. It's a guess, but based on the assumption that we'll have an economy anything like the last ten years, again, in either of our lives.

Edited: changed 'inflation' to 'deflation' re:my spreads point


Re: Catholic Investing - James02 - 07-31-2009

+1 Fishy for taking time to give some good advise.

Quote: This is the sort of prognostication I'm talking about. He doesn't know what will happen. He's making educated guesses at best, and rambling nonsensically at worst. This sort of talk with numbers and terms thrown in passes for 'real' information, when it's just complete and total guessing. Of everything I said above for example, notice I was using historical numbers. Historical returns are meaningless as far as the future goes. What happened yesterday was then, this is now. Part of what he said is somewhat true, in the sense that the markets react like the bunch of tea-leaf readers that they are e.g. if Obama's healthcare plan fails, there'll probably be a little bounce to the market. Sure, why not? Again, no one knows. 
I must have done a bad job in my original post.  I am not giving any specific investing recommendations, and I do that on purpose.  I carefully used terms like "I think".  Yes, it is an educated guess.  But investing is not just a flip of the coin.  So here is my point.  The original post presupposed that she would invest in the stock market.  She was just wondering if you should invest in "moral" stocks.  My point is that carefully consider this idea of investing in stocks right now.  We are getting close to a 50% retracement.  That is a very large move.  Furthermore, Japan is 20 years into a bear market.  My prediction is that we retest and take out the 666 lows.  So if you invest at this level, you can easily lose half your money.  I don't guarantee it, though I am putting money on it pretty soon.  So people should be very careful here.  If you held out through the collapse, then right now you have recouped a bunch of your losses.  You have other options.  Also, you can sell half.  You don't have to sell all of it.  Don't assume that this market will be going up in 10 years.  Ask the Japanese.  Ask someone who invested in 1929.

Quote: As a lagging indicator would do, even if there were a recovery underway--and I have no idea if there is anymore than you know there isn't.
Except that I am a consultant in big industrial businesses, and I know that there is presently no recovery.  Just look at GM and Chrysler.  They are shutting Detroit down.

Quote:Umm...why hasn't the interest we have to pay on our gov't debt gone up then?
You prove my point.  People are parking their money in government debt, and not investing in new projects.  Furthermore, the Fed is buying up debt.

Quote: Eh, not quite yet. Calm down.
Companies are fleeing the US.  Look at Haliburton.  We loved to beat up on Haliburton.  We loved the conspiracy theories about Bush and Cheney, and Haliburton.  Guess what?  Haliburton left the US.  A major technological company with amazing project management abilities has fled the US.  Not good.  If Cap and Tax pass, and Obama Care, then I am going to Defcon 3 level and starting a wheat stockpile.

Quote:As for gold, don't know.  I can easily seeing it drop once the deflation resumes.

None of the spreads look like near-term deflation on the horizon. Why do you expect this as a possibility? Just because of liquidity increases recently? That alone doesn't do it. You know that.
Like I said, I don't know about gold.  There is a big debate in the Austrian crowd over whether we get deflation or inflation.  The deflation crowd is the "Mike Shedlock" crowd.  The Inflation crowd is the "Peter Schiff" side.  Basically the deflationists say that debt is being destroyed so rapidly, that the Fed can not print fast enough to compensate.  They predict commodities will crash, including Gold.  Peter Schiff thinks the Fed will print enough, so he predicts massive inflation coming.

My opinion is that both are right.  I think short term the deflation will resume, but eventually, the credit destruction runs its course, and then all those excess reserves will come to play.  So I am holding off on buying more gold.  I think $700 an ounce is in the future.  But this is where I have little confidence.  Within 5 years, I predict $2000 per ounce.


Quote:We can't even be sure of this. P/E is backward looking, and we have no reason to believe that future earnings will render the current price a 'discount' if you buy now. It's a guess, but based on the assumption that we'll have an economy anything like the last ten years, again, in either of our lives.
I was talking about gold.  I think the stock market will be lower than it is today 10 years from now.  That is an educated guess.

To sum up, there is a lot of investors and speculators that predict the stock market has a lot further to fall.  If you are nearing retirement, please consider their arguments.



Re: Catholic Investing - Iuvenalis - 07-31-2009

Quote:I must have done a bad job in my original post.
I am not giving any specific investing recommendations, and I do that on purpose.  I carefully used terms like "I think".  Yes, it is an educated guess.  But investing is not just a flip of the coin.   
Fair enough. Perhaps you were unclear, or perhaps you were clear and I misread. You're correct that investing isn't just a flip of the coin, but predicting the future of an investment or the macroeconomy can come close, if one is predicting for the short/near term especially.

Quote:So here is my point.  The original post presupposed that she would invest in the stock market.  She was just wondering if you should invest in "moral" stocks.  My point is that carefully consider this idea of investing in stocks right now. 
I think we agree here, for a couple different reasons. Your reason is trends or expected (negative) returns, mine is that perhaps she doesn't have the 'stomach' for the volatility that is in store-- and I'm sure we agree there's plenty volatility in store, whichever way it goes. I don't know her age, so it's hard to tailor anything.

Quote:We are getting close to a 50% retracement.  That is a very large move. 
You're not kidding, that's why I said to consider punting at 1000 (S&P 500), but certainly not now at a significant lost...

Quote: Furthermore, Japan is 20 years into a bear market. 
I want to talk about this. Very, very few I've heard seriously consider this possibility, that we are going to have a long, long, long period of zero or negligible growth. The 'lost decade' or that we just move sideways for 10+ years. I think it's a very real possibility. The Japanese didn't adequately deal with their problems (i.e. zombie banks, etc.) and we haven't done anything substantial either except increase liquidity, which is important in the short term, but these bad assets are pretty much being handled in the same way the Japanese did, which is not dealing with them at all.

Quote:My prediction is that we retest and take out the 666 lows. 
This is where we disagree. Of course, you hope you're wrong too.

Quote:So if you invest at this level, you can easily lose half your money.  I don't guarantee it, though I am putting money on it pretty soon.  So people should be very careful here.  If you held out through the collapse, then right now you have recouped a bunch of your losses. 
I agree, I think many should consider punting over 1000, especially older folks. I'm in my 30's and I might pull out, although, I don't see a particularly attractive alternative asset class right now...

Quote:You have other options.  Also, you can sell half.  You don't have to sell all of it. 
This is a very good point, and she should indeed consider this.

Quote: Don't assume that this market will be going up in 10 years.  Ask the Japanese.  Ask someone who invested in 1929.
Oh I don't. See above. However, there's still some time. I expect a wall between investment banks and banks to get thrown back up, I expect more aggressive loss writedowns on books. If at least these don't happen, I'll come over with some ammo, comics and beer, and we'll share a fallout shelter. You'll need someone to play boardgames with.

Quote:Except that I am a consultant in big industrial businesses, and I know that there is presently no recovery.  Just look at GM and Chrysler.  They are shutting Detroit down.
Well, if I take you literally when you say 'industrial' I'd point out that not much of our economy is 'industrial' so whatever is happening that you're seeing, isn't representative of the economy as a whole. However, I have to confess that I see much more than 'industrial' Global 100 and Fortune 100 clients of mine (50 or so) and indeed, they're not faring much better than the industrials. That is, their profit 'increases' are not from net increases in business (sales growth), but rather from cuts, and I damned well don't see them hiring any time soon. These quarterly earnings are not sustainable (you know, these earnings that drove this rally through the roof? :) ) since in order to report similar earnings into the future, absent a real increase in economic activity, they'll have to continue to cut, cut, cut. And you can't cut indefinitely, unless...

Quote:You prove my point.  People are parking their money in government debt, and not investing in new projects.  Furthermore, the Fed is buying up debt.
You know the Fed's debt purchases are paltry as a percentage of debt issuance, so I'll leave that alone. However, the whole thing about people parking their money there, not so sure. Clearly the rally that you seem to recognize, however false it is, means that people and institutions are parking their money in common stock as well. Also, the demand in the last couple treasury auctions wasn't so hot (perhaps foreboding an eventual increase to attract reluctant bond buyers?), so they're sure not parking it in gov't debt (even it they should be).

Nutshell, I think I'm pretty clear from this and my last post that I'm not sure there's any 'safe' place to park money right now. Even cash if there's inflation. I don't see it coming, but why should I, I'm not psychic, but neither are the Austrians that keep swearing every drop of liquidity (currency) is inflationary (which it's not, necessarily).

Quote:Companies are fleeing the US.  Look at Haliburton.  We loved to beat up on Haliburton.  We loved the conspiracy theories about Bush and Cheney, and Haliburton.  Guess what?  Haliburton left the US.  A major technological company with amazing project management abilities has fled the US.  Not good.
You've given one example, and I'm not blowing you off, but I don't see any data to indicate a 'trend'. Yet. Bank of America has been chartered in what, the Bahamas(?) for a couple decades now. Tax-skirting bastards they are. But it doesn't mean armageddon that some companies do this, and will continue to do this, every year. However....

Quote:  If Cap and Tax pass, and Obama Care, then I am going to Defcon 3 level and starting a wheat stockpile.
However, I agree with you here. In fact, I'll go on the record and say cap and trade (tax) will pass, but Obamacare won't, at least with a public option. I'm a little terrified of some of the other provisions I'm hearing though. I wish the opponents could filibuster this threat, but there aren't enough opponents to not get overridden. I may see you when we barter your wheat for my powdered milk.

Quote:Like I said, I don't know about gold.  There is a big debate in the Austrian crowd over whether we get deflation or inflation.  The deflation crowd is the "Mike Shedlock" crowd.  The Inflation crowd is the "Peter Schiff" side.  Basically the deflationists say that debt is being destroyed so rapidly, that the Fed can not print fast enough to compensate.  They predict commodities will crash, including Gold.  Peter Schiff thinks the Fed will print enough, so he predicts massive inflation coming.
If they are correct and we end up with significant inflation (and we have to "Volcker" it to death), they'll be correct for the wrong reason. Because Austrians all don't get that not all money supply increases are inflationary.

Quote:My opinion is that both are right.  I think short term the deflation will resume,
The spreads don't show this.

Quote:but eventually, the credit destruction runs its course, and then all those excess reserves will come to play.
Maybe, reserve requirements might be going up. That a theory as to why banks aren't lending but are holding TARP funds in reserve. Not fear, but anticipation of increased reserve req'ts.

Quote:  So I am holding off on buying more gold.  I think $700 an ounce is in the future.  But this is where I have little confidence.  Within 5 years, I predict $2000 per ounce.
No way. If things ever get that bad, gold wouldn't be worth 2000/oz, it would be worth *zero*/oz. And a can of pork and beans would be more valuable than a bar of gold.  :laughing:

Quote:I was talking about gold.  I think the stock market will be lower than it is today 10 years from now.  That is an educated guess.
I don't know. We need some real improvement macroeconomically, this rally, until then, is a little silly.

Quote: If you are nearing retirement, please consider their arguments.
If one is nearing retirement, one shouldn't have owned much stock anyway. If one made that mistake, one should get out of the market once they recover a decent amount of their assets, regardless of what they think is the overall direction of equities, and stay out, period.


Re: Catholic Investing - veritatem_dilexisti - 07-31-2009

(07-30-2009, 04:15 AM)Iuvenalis Wrote: The property suggestion, especially the certainty with which it was stated, is pretty hilarious. Trust no one that prognosticates. They don't know any more than you or I know about the future (which is zilch). Whatever happens with 'property' (what kind? residential? commercial? residence? rental?), there is one thing for sure, the proponents of property as the 'magic bullet' almost always neglect transaction costs. They nearly always understate maintenance. So, they bought a house for 400K, put 50K of work into it, and sold it for 500K. They'd say 100K profit, or at least 50K. They neglect that they paid taxes, they paid an agent a percent of the total sale (not just the profit!!) etc. Their profit is <50K, even with a tax break thrown in. Take into account the costs of money (interest) since nearly everyone purchases property with leverage (a loan) and then divide it by the time (the always understated cost) and property is not magical.

Take this example and say this happened over 5 years. They made 40K (50K - 10K closing and agent, and this would be cheap!! = 40K) and neglecting a half a dozen other costs, 40K/5years = 8K/year. They had to put 20% down (even if they didn't, but let's say they did) their return on cash (since they bought with leverage) is 20% of 400k = 80K down payment, they made 8K/year, the return on cash, neglecting everything (like taxes, insurance, other maintenance I didn't mention) is 10%. Taking into account the money isn't free (you pay interest, even after a deduction) and taxes, then inflation this is absolutely no better than the stock market at 7-8% after inflation historically. However, the real estate transaction was much, much less liquid.

Bottom line, transaction costs are huge in the real estate market. And it's worth noting that the real estate market is just that: a market! It fluctuates, it does badly, it does well. Don't think there's any easy investment.

I should have been clearer: I was not referring to property development, but to acquisition of property for rental purposes, which amounts to purchase of an income.