In a new report today title Houses vs. Stocks: Who Wins the Long-Run ‘Sharpe’ Race?, Goldman's Jose Ursua argues that stocks are way better than housing on both an absolute returns basis and risk-adjusted returns basis.
One of the most common risk-adjusted returns measures is the Sharpe ratio. Simply put, it's the excess returns divided by the standard deviation of excess returns. For long-term investments like housing or stocks, Ursua argues "What matters are risk-reward tradeoffs."
Here's a summary of his report...'Read more: http://www.businessinsider.com/goldman-sachs-houses-vs-stocks-who-wins-the-long-run-sharpe-race-2012-5?#ixzz1uM3g7H00
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