12/10/2025
Equity vs Real Estate?
You should select the asset class for investment that you can hold for a very long term. If it's equity, then you should do it in equity, and if it's land, then do it in land. And let me explain why.
Because your total returns come only when they compound over the long run. So if you can hold land over the long run—which most investors can hold because it's not that volatile an asset. It very rarely goes down by 20%, 30%, or 40%.
Whereas equity—although it gives you higher returns—but holding it is very difficult over the long run. Over 10 years, if you look at it, there will be two to three instances in equity when your investment has gone down by 20-30%. And roughly once, it can even happen that it goes down by 50-60%.
So that's why holding equity for 10 years is very difficult.
So if you plug the formula into Excel and see, equity will always be giving you better returns. The only problem is whether you are able to hold your investment for 10 years and 20 years or not.
Because mostly, people are able to hold real estate, and that's why they get phenomenal returns. But they're not able to hold equity, and that's why they underperform in equity.
Do let me know in the comments below.
