The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: fatty who wrote (6291)	10/27/2002 9:32:54 AM
From: Moominoid	Read Replies (1) of 306849

You have to compare like with like and take a margin loan to invest in stocks. One advantage of housing is you can use higher gearing than stocks, but I believe your chances of getting wiped out are then higher. House prices fell 30% in London in the early 1990s and by similar amounts in the more expensive US markets. If I took a 50% margin loan and invested $100 in the SPX at 300, the $200k would turn into $600 now - paying back the $100k loan I would have $400k net minus interest costs of course which you also need to count for the house. In reality I would probably step up the margin loan over time but that is equivalent then to drawing down equity on the house. David

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