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Should I invest in property or Stocks?
Looking at the residential property market, in particular the UK, it has proved a remarkable investment from Post war to current day, inspite of the occasional ups and downs and crashes. Furthermore you can gear your investment via a mortgage.So I suppose there is no denying it's a good place for your money, long term, even spanning generations. Perhaps more difficult short to medium term, especially buy to let. You need good yields to cover rental voids etc. and 'professional' rent-avoiding tenants. Also you cannot always sell the property quickly and cheaply. Pitfalls are not being properly funded for example if interest rates treble as they sometimes do and being caught at the wrong phase (like now). Will this trend continue for the next 60-70 years? Probably!
As for stock market investment this is all about selectivity and can produce equally impressive or better returns over the longer term. Don't forget you can invest in various types of property companies (builders, commercial, nursing homes, residential etc.) The advantage being the liquidity of the investment and also the fact that you can buy a share in the largest UK commercial property company whereas you may not have the funds to buy a large commercial property. With the advent of REITs they can be tax efficient also.
In order for a share portfolio to be successful it must be well constructed and managed.
There is, from memory, a model portfolio, constructed by a firm of stockbrokers, the performance of which has been tracked daily from way back (probably just post-war). I am sure this has out-performed property values. Unfortunately I cannot remember the details, but it is something like this that one must/should compare the two investment classes rather than, say, just the performance of the FTSE100 index
I suggest you look at some 30-40 year charts (adjusted for dividend re-investment) of some well known FTSE100/250 companies and see how they compare with property.
Companies like Shell, RTZ, Land Securities, Marks & Spencer, Standard Chartered, BP etc.
A further point is that equity performance can be massaged up a bit, or hedged by various strategies, for example writing out of the money covered calls or out of the money puts or writing index futures.
And as I mentioned earlier you can buy or sell, for example £1m worth of Shell in an instant and get your money in three days.
The other thing I mentioned earlier was the gearing effect. As you know you gear your property investment by a mortgage, so you may have 20% equity and 80% borrowing. With equites the gearing is in the financial structure of the company, it may be highly geared or the reverse. You can see how the company is structured or financed by borrowings (loan stocks, debenture etc.) in relationship to equity and the effect this will have on the the distribution of a, hopefully, increasing annual profit.
One thing to consider, possibly is the current short-termism of corporate management. The demise of Northern Rock, and others, seems to me to be down, predominantly to greedy and suspect management and appears to be a big factor in the future of equities.
I suspect the answer to your question is...both!
It is a very interesting question you pose and I suggest if you are keen to learn more buy a good book on Portfolio Theory and Mmanagement. I hope my rambling answer has given you some encouragement to look at the subject more thoroughly.