Risk and returns are tied to one fundamental quality: productive asset. A productive asset is something about the business that is the source for creation of value. That is the only thing that can provide any certainty of returns on investment, everything else is speculation. Any real estate I would invest in would be that of utility — a home and an office.
Speculation is when you buy something with the expectation that you will be able to sell it with a higher price to someone else, but you don’t have a real reason behind it (the Greater Fool theory). When you buy gold or any other commodity, or hold real estate without rental yield, you are speculating, not investing. On the other hand, for example, if you bought real estate with the purpose of renting it, and paid a price for it that ensures a minimum return from the rent — that would be an investment. Whether or not you really earn those returns, the amount of effort needed to maintain the real estate, etc would still remain to be seen.
In this example, the productive asset is the appeal of the real estate you own that makes it attractive enough to people for them to pay you to use it. Each business has such a quality that acts as a catalyst to create value, that later reflects in sales, then profits, and ultimately the stock price. Both gold and real estate have had multiple periods of sub-par returns and are equally risky.
Hence, it is better to invest in a business who’s value depends on its productivity rather than an idle investment who’s value depends on how the crowd wants to value it at a given time.