You know that over most long periods, stocks beat bonds. You know that while any money you'll need within five years or less is best off in more stable places, such as money market funds or CDs, longer-term money is most likely to grow quickly in stocks.

Yet ... you doubt yourself now and then. You find yourself tempted by real estate -- especially when it looks like your neighbor or pal is doing well with it. You even wonder whether you might do better investing in collectibles, such as old cars.

Well, hold those horses. (Or that horsepower.) True, some people do make a killing in real estate -- but you usually have to really know what you're doing, and the timing and location gods need to be smiling on you, too. Overall, since the mid-1960s, real estate has averaged between 6% and 7% annually. And the recent housing bust isn't the first time that real estate has delivered losses to investors over significant periods of time. Real estate isn't the silver bullet some think it is.

A killing in cars
As for automobiles ... back in 1958, John Chesnutt bought a 1957 Chrysler 300C from a friend for $3,000. Some 50 years later, he still has it, and thinks he could get $60,000 for it, if he were to sell it. That probably sounds pretty impressive -- a 20-fold return! But crunch the numbers, and you'll see that it's really just an average return of just more than 6% annually.

Compare that with the stock market's average annual average of between 9% and 10% -- along with stocks' much cheaper maintenance and upkeep -- and you'll see that stocks compare favorably. But wait -- the past 50 years have delivered their share of blows to the stock market. So how did the S&P 500 do since 1958? As it turns out, it averaged 9.8%, even including 2008's drop of nearly 40%.

Don't just take my word for it, though. Read up, learn more, and do what's right for you. Maybe you know enough to make millions in real estate. Maybe you can restore and add a lot of value to old cars. Maybe you just don't have the stomach for stock-market volatility -- such as we saw even with blue chips in 2008:


2008 Return

Boeing (NYSE:BA)


Best Buy (NYSE:BBY)


Cisco Systems (NASDAQ:CSCO)




General Electric (NYSE:GE)




Coca-Cola (NYSE:KO)


Data: Morningstar.

Clearly, stocks can be volatile, especially in the short run. But that doesn't make their long-term track records disappear, nor does it erase the tendency for healthy, growing companies to see their stocks recover. For example:


2009 Return, Year to Date



Best Buy


Cisco Systems




General Electric






Data: Morningstar, as of Sept. 14.

For most of us, stocks are our best option for long-term investments. You can invest in them easily via a broad-market index fund -- and there's no shame in that. Whether you choose individual stocks or stock mutual funds, you'll drive away with a great deal.

Get help on figuring out how to invest in the best stocks from the Fool's Rule Your Retirement newsletter. We'll point you to great stocks and funds that will help you make your financial dreams come true. See for yourself with a free 30-day trial.

Longtime Fool contributor Selena Maranjian owns shares of General Electric and Coca-Cola. Best Buy is a Motley Fool Stock Advisor pick. Best Buy, Intel, and Coca-Cola are Motley Fool Inside Value picks. Coca-Cola is a Motley Fool Income Investor recommendation. The Fool owns shares of Best Buy. Try any of our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.