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Real Estate vs. Stocks: Which Has the Better Historical Returns?

[Updated: Mar 02, 2021 ] Sep 06, 2019 by Matt Frankel, CFP
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Unlike investing in stocks, where it’s irresponsible to invest with borrowed money, you can use significant amounts of financing when investing in real estate without adding a ton of risk.
Time Period S&P 500 Total Return Vanguard Real Estate ETF Total Return
1 year 9.4% 13.3%
3 years 47.6% 13.1%
5 years 68.7% 45.7%
10 years 296.6% 329.5%
15 years 270.5% 260.3%
20 years 213.1% 619.7%
Since May 13, 1996 621.8% 865.3%

Data source: yCharts. Time periods ending on 7/16/19. May 13, 1996, is the inception date of the Vanguard Real Estate mutual fund.