Yes, in long term the equity market does go up, as measured in decades. But there are some absolutely soul crushing corrections as well. The s&P 500 went from 1565 in October 2007 to 676 in March 2009, over 50% decline in 1.5 years. That loss is magnified when you panic sell at the bottom and stay on the sidelines in a savings account for the next 6 months to 20 years, "I lost 50% and I don't want to lose more"Thanks. I appreciate that. I guess I was thinking with the philosophy that the equity market always goes up long term. I am not sure primary home real estate goes up that much or at least not at the pace at which broader market/equities go up ..long term. I just fear the opportunity cost by not being in the market. Why do folks prefer a paid off house especially if their mortgage interest rates are way below what the average market returns.
"Everyone has a plan until they are punched in the face". --Mike Tyson
If you want more equity, then just spend part of your portfolio ($50K) on SPY/SPX calls. You will get huge upside, and if the market tanks, you are only out part of your nest egg and you still have a house and your kids still go to private school.
Statistics: Posted by Rocky Mtn Man — Sun Oct 06, 2024 10:08 pm — Replies 4 — Views 478