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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: Follies who wrote (11470)	2/22/2000 10:48:00 AM
From: BGR	Respond to of 42523

Dale, I would not put real estate in the same class as gold. Real estate has a lot more practical use. All three basic human requirements for survival - food, clothing and shelter - have been intrinsically linked to land, directly or indirectly, since the beginning of civilization and continues to hold even today. Real estate has a very useful purpose. However, in a recession, even real estate is not a good hedge against asset price loss. And, amortized over the average human lifetime, including booms and busts, it appreciates less than equity investments. Because of a quirk of tax law, which allows highly leveraged (way more than the 50% that equity investors are subject to) real estate purchases at very low interest rates subsidized by the Govt., several people think of real estate as an investment (I am excluding professionals here). I don't. I live in my house and expect its value - that derived from providing shelter to me and my family - to remain the same before and after a recession, since it is not a liquid investment and I am not going to sell it anyway, which makes market prices irrelevant. JMHO. -BGR.