A recent article on Newsmax focused on the number of billionaire investors that are now selling large quantities of stocks.  That is certainly shown by the Dow Jones Industrial Average being down for the last month.  At the same time, big money from billionaire investors is heading towards opportunities in real estate investing.


The piece, "Billionaires selling stocks, Economist Knows Why" reported how legendary investors such as Warren Buffett, George Soros, and John Paulson are now unloading stocks.  Buffett, who has stated that his investing philosophy is, "Be greedy when others are fearful and fearful when others are greedy" has sold millions of shares of Kraft (NYSE: KFT), Intel (NASDAQ: INTC), and Johnson & Johnson (NYSE: JNJ).  Paulson, who made $5 billion shorting the US housing market during The Great Recession, and Soros, who "broke the Bank of England" in a billion dollar trade, have dumped shares of companies in the financial sector such as JP Morgan (NYSE: JPM), Citigroup (NYSE: C), and Goldman Sachs (NYSE: GS).

By contrast, earlier this year in a CNBC interview, Warren Buffett stated that houses were better investments than stocks.  In the CNBC article by Alex Crippen detailing the interview, Buffett also said that houses were best held for the long term, and refinanced when rates fell.   If it were practical, "The Oracle of Omaha" said he would, "buy up a couple hundred thousand single family homes."  As detailed in another article on this site, foreign investors are following that advice from Buffett and plowing billions into American real estate, especially into Chicago housing.

What is practical is passive investing for the long term in high real estate such as foreclosures, turnkey properties, small apartment buildings, private mortgage notes, and flipping properties.  Real estate investing has proven itself to be the best means for accumulating individual wealth.  Over the last two centuries, real estate has produced more than 90% of the world's millionaires.  When stocks and bonds plunged during The Great Recession, the level of rental income in the United States actually rose!

These returns can be enhanced by holding the real estate in a retirement account, such as an individual retirement account (IRA).  That shields the property from taxes.  If rental income is received, there are no taxes.  A sale can result in a huge profit, but there will not be any capital gains taxes so long as the property is in retirement account.

Passive investing in real estate for the long term will profit no matter what stocks billionaire investors are selling.  That has been proven by the history of real estate in creating millionaires.  There is no need to expect for results like that from real estate investing to change in the future!