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according to Modern Portfolio Theory and the Capital Asset Pricing Model, an undiversified portfolio contains risk that is not being compensated; that the only
by blastrat 10y ago
according to Modern Portfolio Theory and the Capital Asset Pricing Model, an undiversified portfolio contains risk that is not being compensated; that the only rational way to invest is in a (weighted) little bit of everything; and that a little diversification is better than no diversification.
Which is same conceptually as "investing on average across the entire country". So, while I'm not encouraging real estate investing, what you are saying runs completely against the generally accepted conclusions of Finance Theory.
- pbreit 10y agoNo, you're too caught up in theory. Or you need your theories to acknowledge that a large number of people who buy a house are not doing it for investment purposes.
- blastrat 10y agoyou are the one who used the word "invest"; you used it wrong in that case. And to say I'm too caught up in theory is ridiculous, theories (of everything) are how we understand (everything).