If you’re like us and you’ve been watching the daily seesaw in financial markets this year, you’ve seen plenty of noise: election season, interest rate debates, recession, and news of tariffs on – tariffs off – and tariffs back on again. For many investors, it feels like we’re in uncharted territory. But we are here to try and tell that we’re not.
If you look historically over the last 100 years, the financial markets have moved through dozens of cycles—booms, busts, wars, bubbles, rate hikes, pandemics, policy shifts, and everything in between. Yet the long-term trajectory for smart, patient investors has remained consistent.
Let’s take a quick look at market averages for the most popular assets in the last century – going back past the Great Depression.
Since 1925:
- Stocks have returned over 10% annually on average
- Bonds have offered stable, modest income
- Real estate has quietly compounded wealth—through cash flow, appreciation, and tax advantages – often with far less volatility than Wall Street.
Long-Term Compounding
The simplicity of compounding and patient investing can be more obvious when we look at a rough estimate of $100 invested at the bottom of the Great Depression in 1932:
- $100 in the S&P 500 then with dividends reinvested would be worth approximately $2.7 million today
- $100 spent on real estate then with income reinvested would be worth approximately $3.4 million
Like it or not – in many cases real estate achieved this with less volatility and greater tax advantages. Obviously, we are biased towards real estate – as it has the unique ability of real estate lies in its main four approaches to generate returns: income, appreciation over time, loan paydowns via loan amortization, and the various but significant tax benefits. This combination has allowed real estate investors to build wealth more consistently than almost any other asset class.
Traditional Assets vs. Real Estate
That said – stocks, bonds, and gold have all done well and had their moments over the last 100 years.
Stocks experienced remarkable growth over the years; bonds provided stability but suffered during inflation. And gold served and continues to act as a great hedge – but underperformed during economic growth but does not compound or nor produce income.
With Real Estate – whether we look at post-WWII boom, or the 1980s or the 2008 crash, while potentially painful at the time, both proved to be a generational buying opportunity.
Looking back, real estate has delivered consistent returns through:
- Revenue returns or passive income
- Appreciation of the investment asset
- Mortgage paydown via amortization
- Tax advantages through depreciation and 1031 exchanges
Regardless of what you invest in – volatility is temporary.
In every decade, there’s always a “new reason” not to invest.
- In the 1970s, it was inflation.
- In the 1980’s it was interest rates and the ’86 market crash
- In the 1990’s and 2000s, it was dot-com collapse, then 9/11, then the ’08 GFC
- In the 2010s, it was global debt concerns, and a slow recovery from the GFC
- In the 2020s, it’s been everything from Covid, AI disruption and now political polarization.
The headlines will always change, but the principles don’t.
The Real Estate Advantage Through Market Cycles
Though not perfect, real estate has shown resilience through diverse economic environments.
During Inflation: Real estate served as a natural hedge. Property values increased with replacement costs, and rents adjusted upward, preserving investor purchasing power.
During Recessions: Income-producing properties with strong fundamentals continued generating income even when valuations temporarily declined.
During Low Interest Rates: Cap rate compression created significant appreciation while investors benefited from low mortgage rates and steadily increasing rents.
During High Interest Rates: Cash-flowing properties-maintained value better than stocks or bonds during monetary tightening, creating opportunities for sophisticated investors.
High-income professionals often look for ways to diversify outside the stock market. That’s where private real estate funds and syndications come in – especially those backed by strong fundamentals, experienced operators, and thoughtful asset selection.
With real estate, you’re not just chasing returns or an IRR metric. You’re building equity, passive income, and tax efficiency—all in one.
The One Thing That Hasn’t Changed
Through a century of dramatic change—from the Great Depression to the Digital Age—one investment truth has remained constant: patient capital deployed in quality assets has been rewarded.
Those who focus on cash flow, capital preservation, and long-term appreciation continue to build wealth regardless of the headlines.
The next 100 years will undoubtedly bring new challenges and opportunities. But if history is our guide, those who maintain discipline, avoid speculation, and prioritize fundamentals will continue to thrive through whatever cycles lie ahead.
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