I wrote a post talking about having a balance of investments in both stocks and real estate. It turns out that the "big boys" use this exact strategy and get some of the best returns. Look at how Harvard and Yale invest their endowments. It turns out that they invest approximately 30% of this money in real assets like real estate. And what is their return? Over 10 years it is 15% and 17% annualized returns for the two schools.
Even though I was upset that I could not sell my real estate last year, property values here have not declined at all and in fact have risen over the past year. So while my 401k has taken a beating this year, my real estate equity has been stable.