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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Wyätt Gwyön who wrote (27089)2/10/2005 2:15:26 PM
From: GraceZRead Replies (1) of 306849
 
but, most simply, paying off one's home as part of a fixed income allocation strategy is something that makes sense imo. there aren't too many other good deals in fixed income.


True, and I strongly recommend it to my clients who have a large portion of their net worth in equities and are looking to reduce risk. That said, I'm not adverse to home mortgages for those who need to leverage their net worth to grow and have another place to put the money that yields more than a mortgage. It depends on the individual circumstances. Some people go over board when they preach all debt is bad.

you should look at a person's portfolio before making a blanket statement like that

You are right, I can't really judge whether or not you are risk averse without looking at your portfolio... or I could simply do what I did, accuse you of being risk averse and have you reveal to me that you aren't. I don't necessarily believe you (even if you believe yourself) since I've had a lot of exposure to your writing here and I'd say there are very few on these boards who aren't risk averse right now.

i don't think i could have had the returns i have had if i'd been risk averse

I've met very few investors who are adequately compensated for the various risks that they take but it seems the more they have, the more likely they are to settle for sub par returns. In fact there appears to be an inverse relationship between risk tolerance and size of the pile. Its one of the reasons people find its a relative "no brainer" to turn 10k into 100k and difficult to impossible for them to turn 1 million into 10 million when theoretically the two efforts should be equal.
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