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Owning raw realestate requres management, like any other business. but there are REIT. I'd much, much rather have 5 million in a vanguard REIT than Seattle/SF
by ixacto 8y ago
Owning raw realestate requres management, like any other business. but there are REIT. I'd much, much rather have 5 million in a vanguard REIT than Seattle/SF realestate...
- tehlike 8y agoTaking loan on a reit isa different issue, however.
- kokey 8y agoIt would be similar if they allowed people to use their ownership of stocks and index funds to use as leverage to borrow funds to buy more stocks. They could borrow based on the risk ratings of stocks, and everyone knows it's a fact that index funds are the safest investment out there so the risk on that should be close to 0 and allow the biggest leverage. I'm going to stop right there, I'm starting to frighten myself.
- tormeh 8y agoIndex funds usually halved in value during the financial crisis. They still have exposure to whole-market crises, even if single sector or company crises don't touch them much.
- kokey 8y agoI was being sarcastic there. Everyone also knew for a fact that property is a very safe investment and things backed by property is a very safe investment. Before the stock market took a knock over the past two years, people were talking the same way about index funds as they were talking about property. The same thing with bitcoin really.
- tormeh 8y agoI have a bit less faith in real estate than you do. My impression is that, from a regulatory point of view, real estate is regarded as a safe investment because that results in cheap mortgages, and cheap mortgages are popular among voters. It's not that real estate is safe per se. Index funds usually recover to before-crisis levels in about 5 years, so they're not terribly risky in that sense. The Bitcoin believers were always lunatics. That people will believe in stupid shit is nothing new.
- basicplus2 8y agoThis is being done http://www.finra.org/investors/dangerous-game-using-your-portfolio-collateral http://www.finra.org/investors/dangerous-game-using-your-por...
- Latteland 8y agoPeople do that. Plus far more people do it 'indirectly' through options.