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Couldn't you apply that for anywhere in the market? Eg. my money is in index funds, but if the market collapses, the value of my index funds gets wiped out and
by mkaziz 10y ago
Couldn't you apply that for anywhere in the market? Eg. my money is in index funds, but if the market collapses, the value of my index funds gets wiped out and I can't exactly buy a house on the cheap ...
- hx87 10y agoIf the market collapses, you're screwed anyway, but at least your index fund is diversified (I hope) and liquid, whereas your house is the most undiverse and illiquid asset you can buy.
- jdmichal 10y agoI'm not quite sure what you mean. My point is that you need somewhere to live. It's like being short a stock and you need to cover. Covering a short is closing an investment position, not opening one. If you sell the house, now you're short again and need to cover. Once you buy your second property you are actually investing.