I prefer stocks for the long term because they are liquid and can thus be easily liquidated; however, I like to diversify, so I also invest my solo 401k in wide variety of investments such as stocks, real estate, notes, private stock, hedge funds, and tax liens.
I think you wisely answered your own question. Not one or the other, but diversification through both. There are periods when privately-held real estate outperforms and other periods where publicly-traded stocks outperform. The beauty of rental properties is--if structured right--your tenants actually "buy" the property for you over time. On the other hand, you can sell publicly-traded stocks at the drop of a hat while you might be kind of stuck with your real estate for a while. A few thoughts re: you venturing into stocks: 1) Unless you have the time and are willing to make the commitment to individual stock investing, consider instead investing in exchange-traded stock funds. You get market exposure but they are diversified among the stocks of many companies, so you avoid single stock risk. 2) Since you're already heavy into real estate (albeit private), you may want to minimize your exposure to publicly-traded real estate stocks (REITs or funds that invest in them). 3) While nobody can precisely and consistently "time the markets," stock valuations are very high right now relative to what'd be sustainable in more normal economic environments. Most financial assets have been goosed by central bank monetary policy on steroids. So you might want to either (a) wait until after a healthy pullback in stocks before you invest, or (b) "average" your way in by investing a bit at a time instead of buying-high all at once. There's more art than science to this, and no guarantees of course. Hope that helps. All the best!
I like the diversification and therefore own real estate (about half of my investment portfolio), has some in mutual stocks and also invest in trust deeds and mortgage notes. The reason I like real estate the most because over the long term it overperforms the stock market, you can leverage it, you have more control over the investments. There are just some of the advantage. I also really like the passive investments into real estate notes - passive, low risk, good returns! You can use self-directed IRA or Solo 401k to invest in alternative assets and diversify your retirement portfolio this way.
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