Both are profitable although real estate I think is more susceptible to market cycles. In America I think real estate would be a really good investment over a 10-15 year period and even beyond. Although in Australia where house prices only peaked six months ago and with more interest rate rises, yes I said interest rate rises on the way, more and more people in the land down under are going to default.
Here in Australia the real estate sector has only just started slowing down.
I personally like stocks because they are so nimble, and I don't need to take on any debt.
I keep a balanced portfolio of about 70% investments and 20% trading and 10% cash, I mainly focus on income type investments which I add to my trading profits together with any business income to re-invest.
Also with stocks you can get quite creative (legally) with franking credits which is just the icing on the top.
Personally I am using stocks to get me into property without taking on much debt.
When I do get into property I will no doubt have a offset account and use the equity to snap up bargains.
Personally I think its better to start off in stocks, then go into property.
It's easier than the other way round!