5 ms·

I don't think zeroing out home equity to buy bonds is a bad idea. After all, you either have real estate exposure or some other one, bond or equity exposure. W

by smabie 6y ago

I don't think zeroing out home equity to buy bonds is a bad idea. After all, you either have real estate exposure or some other one, bond or equity exposure. While I haven't done the analysis, I would venture to guess that investment grade bonds at the very least have lower volatility than real estate.

stanrivers 6y ago
Do you think the investment grade bonds are going to yield better than the interest rate on a home mortgage ?!?
- rgbrenner 6y ago
  Yeah I doubt a bond would pay that well.. but he does have a point about risk exposure. Your mortgage could be thought of as an investment in the local real estate market.. diversifying that risk by buying shares in a REIT could be a good strategy... especially if you're in a low-growth area (ie outside of the big cities, midwest, etc).
  - H8crilA 6y ago
    Hey, here's a shockingly simple idea: don't buy a home if you don't want equity, rent instead.
    - smabie 6y ago
      There are systematic advantages to having a mortgage vs renting.
- smabie 6y ago
  Maybe not, but you can easily move into lower grade and higher yield debt depending on the interest rate of your mortgage.
deleted 6y ago
[deleted]