What is the best long term investment? Stocks, real estate, or investment grade life insurance?

Stocks have a down side. Real estate may also have a downside, along with liquidty. Investment grade life insurance has limits.

NEVER and I mean NEVER "Invest" in life Insurance! Thats an order! Best long term real estate investments are REIT's, you want to find a fund that manages large office buildings and other commercial real estate that is rented or leased out because there is always demand for prime office space, check out Alpine realty fund or Ivey Real estate fund. Stocks, unless you have some inside info or know what your doing, day trading stocks is a losers way to get started in the stock market. Mutal funds offer the best protection from market fluctuations, or stocks that have been around a long time and that pay dividends, never by a stock that pays less then .50 cents a share and never buy a penny stock unless you know its a good investment. Shelter all investments from taxes, keep good records and use your investments to help generate bigger tax refunds that should be invested not spent. Any good tax advisor can help you with that, if you go to a CPA make sure they know how to do taxes, most don't.

Property has a cycle of up and downs. I have doubled and more all my investments since 1984 or so.

If you look purely at the returns, then stock is the best long term investment. At least historically it's been that way. However it can have very high volatility.

Real Estate has been on a tear lately, but bull market in real estate doesn't come very often. Otherwise, real estate grows slow and steady. The illiquidity makes real estate less volatile.

Don't know much about investment grade life insurance, but from what little I know, those tend to be rip-offs. You are better off buying the insurance and investment parts separately. Lower fees and greater flexibility.

I guess if it was up to me, I'll use my money to buy a decent house somewhere safe and peaceful. Then I'll wait for a few years for the price to go up. Then I'll renovate it to look and feel the best. After that I'll resell the house at bigger profit margin.

Stocks - it's tough to observe and analyze which company's the best or which company's share prices will rise. You might want to spend your time on something else simpler that require less time to master.

Investment-linked insurance - you can forget it. If you want to, buy only term insurance and invest the rest in mutual funds. Term insurance is the cheapest insurance. Investment-linked is just there to tempt you to put away your money for the insurance company to profit. The return will never be higher than mutual funds.

Stocks.

Financial experts say mutual funds are the best long term investment. Mutual funds are professionally managed, affordable, diversified, and easily liquidable. Investors should carefully check the prospectus before investing into a mutual fund. There are many out there and only a few of them can match your objective. Mutual funds have perform an average rate of return of 12% in the past 25 years.

Stocks are very risky investments and you take full risk on how your portfolio should perform. You need to constantly follow company earnings and reports and decide when to buy and when to sell. Rate of return is depended on how you invest it.

Real estate have perform an average rate of return between 5-8% in the past 25 years. I would consider this a conservative investment. They are not the best way to invest, but its good to have if you want to keep your portfolio diversified.

Life insurance policies are not investments, according the SEC. They are cash value or savings. Rate of return on cash value has been around 3-5% over a 20 year period. I say over a 20 year period because thats how long the insured needs to keep to earn that 3-5%. If they insured cancels the policy before that, its definetly less than 3%. In cash value life policies, no cash value is built up in the first two years. If you ever wanted to use the cash value, you have to borrow it and pay a monthly interest. Its just like a loan. Nobody knows this unless they have read their life policy. If you live to age 98, you get to keep all the cash value, but lose the death benefit because your policy expires at age 98. If you die before age 98, you lose all cash value, but your beneficiary gets the death benefit.

So, if you are considered investing for long term, I would invest in mutual funds. I would put them in tax-deferred accounts such as a Roth IRA. For college plans, I would put them into 529 Plans. If you don't have a IRA, you should start one up. Even if you have a 401k at work. Eventually, you will have to move the 401k into an IRA at age 59 1/2 or when you quit the job.

I think we can pretty much scratch life insurance off the list. Although some policies do have a cash out value after some years, the policies are designed to give a return to the insurance company rather than the insured.

So the choice is between sotcks and real estate. Both have their pluses and minuses. The biggest minus with real estate is the maintenance, illiquidity, and taxes. The big minuses with stocks are they are investments in companies that very likely are mismanged by thieving CEOs. So pick your poison.