It started innocently enough: The wife and I were considering browsing for a piece of undeveloped waterfront up in northern Minnesota, where I'm from. Maybe we could find a deal on something that would make a nice summer home some day.

It ended kind of ugly. Apparently, the real estate "boom" (if you're charitable) or "frenzy" (if you're realistic) is going full force even in a place where the summertime mosquitoes will fly off with your golden retriever -- if he can survive the five-month, 30-below winter.

The only thing I could find in our price range was -- I kid you not -- a piece of honest-to-God swampland. The real estate agent described it as "low," but using Google's nifty satellite maps, I could confirm what I already knew. Buy this slice of "lakefront," and I'd be shelling out more than $2,000 an acre for muck, cattails, and all the wood ticks I could pick out of my scalp and armpits.

When I balked, someone familiar with the market up there told me I should consider buying anyway -- as an investment. "It'll get you 20% a year . better than your stocks."

This perception is, of course, a large part of what's driving real estate prices through the roof these days. Easy money! Never goes down! Get in now or you'll miss your chances! That's why upward of 25% of buying these days is done by a new crop of rookie real-estate tycoons.

With all due respect to the experts, I'll stick with stocks over swampland. Here's why.

Stagnant waters
I can understand the public love affair with real estate. Aside from the recent -- to my mind fleeting -- promise of easy riches, stocks are just plain hard for some to fathom. They remember being stung by the likes of bubble-era Cisco (NASDAQ:CSCO) or Tyco (NYSE:TYC). Land, you can stand on (or swim on, in this case). It doesn't just disappear, or become 80% smaller in a few months. It seems safe. It seems like a real investment. But is it really?

Sometimes, perhaps, but in an overheated market like this, I'd say the real opportunities are fewer than people think. Take this bargain swamp of mine. Even if I just paid cash for this waterlogged wonderland, several things would need to happen in order for the $2,000-per-acre northern Minnesota swampland to become my 20%-per-year "investment." One, the value has to appreciate beyond the significant fees and other closing costs I would incur at both ends of the transaction. Let's also note that this property would cost money just sitting there. I could expect taxes to the tune of a couple thousand a year while I held it, hoping for the score. (If my hypothetical property cost $75,000 to begin with, after two years, I'd already be about $5,000 down, or about 6%, just on taxes and fees, a lot more if I borrowed money to obtain it.)

Next, I'd have to assume that weary downstate city folk are going to keep their appetite for anything lake-ish. What are the odds that this will continue when the banks stop handing out free money? If the money dries up and the buyers blow away, I might be soaking in that swampland for a long, long time. Could I make a killing? Sure. Will I? There's no way to know. There's no good way to even figure the odds.

Thriving commerce
As investments go, stocks are nearly pain-free. Part ownership in a business, I can get for a song -- $5 per transaction, via my account at Ameritrade. I can spend as little or as much as I want, even use margin for leverage. Since stocks, as opposed to bogs, have the right kind of liquidity (financial), I can get out any time I want. And, unlike the swampland situation, my returns aren't dependent on interest-rate whims and wishful thinking about the future market.

With stocks, I can make a reasoned calculation about a company's value, and since the market is manic, I can wait around for these stocks to get cheap enough for me to be very sure that my probable returns will outweigh my risks. In fact, the Street has offered up deals on some of the world's biggest brand names this past year.

Hunting brand-name bargains and calculating risk-adjusted returns is a full-time habit for those of us on the Inside Value team, and for good reason. Studies -- not to mention the track records of people like Buffett, Neff, and Davis -- have shown that value investing outperforms "growth," the overall market, and even monkeys with dartboards. (I couldn't find anything that compared the strategy to swampland, so please, send me those links.)

What do you suppose the odds are that people will suddenly stop drinking Coke (NYSE:KO) or give up their chewing tobacco from UST (NYSE:UST)? Pretty low. Will people stop buying Nokia (NYSE:NOK) phones or watching movies from DreamWorksAnimation (NYSE:DWA)? Not likely.

Yet, the market offered substantial discounts on all of these companies over the past year, making for some compelling opportunities. It takes a bit of study to figure out whether or not the drops made them real values -- and I'd say the jury's still out on DreamWorks. But Nokia and UST made my own A-team, while Coke became an Inside Value pick. In the mean time, while we wait for the market to re-warm to the shares, the companies actually pay us to own them, up to 4.7%, at a tax-advantaged rate.

The Foolish bottom line
Find me a piece of swampland that offers all this, with the numbers to back it up, and I'll put on the boots and take a look. Until then, I'll stick with a reduced-risk stock strategy that has bested the market year after year. If you'd like to step away from the bog and invest with more foresight than uninformed faith, a free 30-day trial of Inside Value is just a click away.

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Seth Jayson is preparing his Pike River moccasins for a look at that dividend-paying swampland. At the time of publication, he had shares of UST, but no financial position in any other firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.