Where to Invest Housing Vs Stock Market Essay Example | Topics and Well Written Essays - 500 words

Where to Invest Housing Vs Stock Market - Essay Example This also means that the investors have to rationally decide investing into different markets and instruments which coincide with their investment preferences therefore, choosing between investing into stock market or housing market is based on such investment preferences. It is generally believed that prices in housing market tend to inflate at the time when stock market performs better. This correlation suggests that a high performing stock market tend to improve the overall economic environment which also supports other markets. However, what is also important is the fact that while considering making a decision to investing into housing or stock market is dependent on the returns offered by the alternative investments at the acceptable level of risk. (Blake, 2000). Therefore, if all other things do not change; investor will make a decision where return is higher and risk is minimum. What is however, most critical is the fact that investors often face dilemma when the respective risk profiles of markets start to show greater volatility. It is very well known that making an investment into stock market is the riskiest investment because stock markets, historically, have shown greater volatility, hence greater risk, over the long period of time.