2 ms·
AIUI, investing in the stock market has a higher expected return with similar risk over a 30 year period. Owning a home is putting a large portion of your net
by rictic 8y ago
AIUI, investing in the stock market has a higher expected return with similar risk over a 30 year period.
Owning a home is putting a large portion of your net worth into a single asset. From an investment perspective, that goes against the central principle of portfolio management: diversified risk.
- toomuchtodo 8y agoEveryone needs a place to live, and most people aren’t going to move frequently enough where renting would be a superior option (excluding specific outlier markets like SF and parts of NYC). The mortgage interest deduction isn’t terribly generous, but property taxes usually provide for an exemption if you’re an owner versus renting. We subsidize home ownership heavily in the US. I’m not arguing you should treat your home as an investment primarily, but if you own or plan to, recognize it for what it is, another asset in your portfolio. Also, I have a comment in this thread where I point out that future market returns are expected to be on par with your mortgage rate; paying your mortgage down would be a better return than investing if those predictions hold true.