I’ll take the “least sophisticated” remark as a compliment.This is the least sophisticated argument I've heard to not having a separate real estate allocation in your portfolio. Now I'll freely admit that real estate investing is optional, but don't pretend you're investing in real estate because you live in a house you own instead of rent. That's a consumption item, not an investment. Home equity should be irrelevant to your investment portfolio. Owning a Chevy is not the same as investing in General Motors and owning your house is not the same as owning a small apartment complex as an investment.OP, do you own a house already? If so, what percent of your overall assets is made up of the home equity?
The point I am making is that homeowners are sensitive to the real estate market, and people’s primary home is usually their largest asset. Of course your primary home should not be treated as an investment, but don’t dismiss its value either. Furthermore, depending on how the home equity is leveraged (mortgage or HEL/HELOC), further overexposure to real estate could be undesirable.
Statistics: Posted by Gradient Descent — Sun Mar 10, 2024 11:05 pm