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Real estate isn't a very volatile asset class. Using leverage in more volatile asset classes, like FOREX, is where people run into big problems very quickly. Yo
by fredophile 7y ago
Real estate isn't a very volatile asset class. Using leverage in more volatile asset classes, like FOREX, is where people run into big problems very quickly. Your bank will also make you buy insurance if you're getting a mortgage with more than 5x leverage. Good luck finding anyone that would insure your stock picking at 10x leverage.
- Slartie 7y ago> Real estate isn't a very volatile asset class. This conventional wisdom has been increasingly getting less true over the last decade. Valuation increases of 5-10% per year on a regular basis are also "volatility".
- magicalhippo 7y agoMy home will not depreciate much relative to other homes I could have bought. Yes I'm forced to sell during a downturn it's not good, but once the market picks up it's almost certain my home will increase in value as well. Harder to have the same confidence that the stocks I picked will survive a downturn as well as my home.
- jdsully 7y agoAll your arguments of safety are even more applicable to index funds since you actually own a slice of the entire market rather than just being merely correlated as you are with your house.