[Source and more commentary: Misha’s Musings]
True. but with the effect of leverage you would have lost a helluva lost more on housing.
take a 25% downpayment on a house say, or alternatively invest it in the stocks..
stocks..you’d lose 35%
housing..you’d lose the lot
Very nice point, dothemath, and not something one would normally think about in this context. Leverage is great when things are good, and devastating when things turn down. On the other hand, there’s no “loss” in either your stock position or your house position unless and until you sell.
Tell that to your stock broker when you get a margin call.
“Either way” assumes only two ways. Those who bailed or did not participate in either market won and won big comparatively speaking.
[Editor’s Note: True. Very true.]
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