One of the most interesting articles I read on Monevator is
this one, entitled "10 reasons why houses are a better investment than shares". Most of the commenters seem to have interpreted this article as saying that real estate as an asset class offers better returns than equities as an asset class. What the writer actually shows is that the psychological and social context of buying a house "forces" people to invest in a Bogglehead-like way without knowing it, and that's why most normal people have tended to do better with real estate than with equities. A mortgage is basically a legal commitment to put a certain, fairly large, amount of money into your savings pot every month for a number of decades, and to rarely if ever sell the asset that those savings are being invested in. A lot of people view their house as an investment, but the community looking to houses to turn a quick profit by renovating and selling them in a short time is much smaller. Not a lot of people with positive equity and enough money to meet their repayments were desperate to cash out their houses in 2008 for instance, whereas lots of people in an otherwise decent financial position were desperate to cash out their shares.
With stock investments, the psychological and social context is precisely opposite. More often than not when I (rarely) hear people talking about the stock market it's about something like day trading, "hot tips", and so forth. The general public treat buying houses as steady accumulation of wealth, stock investments more like a day at the horse races. They also, while much slower to put it in as many words, see savings and retirement as a low priority or simply not one at all when it comes to allocating their income, while mortgage repayments are a very high priority. It's very rare you'll find someone who will put aside 10-20% of his salary for investments before even thinking how to consume the rest, whereas a lot of people will scrimp and save to make mortgage repayments, even on a house that's larger and more expensive than they need.
So either people are indeed too dumb, or our society is just wired wrong, for most to do well out of stock investments, or probably any liquid investment.