Stocks vs real estate
Guys, I need your help to understand pros and cons not buying a first home(scared of high price) and keep investing in stocks/etf(may be expecting 12% return) What do you think ? Should I buy my first home or wait for sometime(frankly I am not in a rush to buy home due to low rent same as interest on 800k home for next 5 years) ?
Which one has higher Sharpe ratio?
Yes I am at chapter 1 :)
Expecting 12% stock returns? Hmm, the complacency around stock returns is what will make the next downturn (whenever that is) especially hard for most.
Yea this will cause kaboom
I’m not saying it would cause the implosion but people are making projections of affordability on houses and expenses based on a crazy stock trajectory. ARMs with teaser rates are back. Refis to go on vacation is being pitched too. Oh well...
We've been riding a bull market for quite some time now. Depending on your location, most home prices are at an all time high. A lot of people are predicting a correction sometime in the next year (who knows if that'll actually happen) but if you're looking to buy a home it may be worth waiting. That being said, a correction in the housing market will likely affect the stock market as well
Pros, you don't have a mortgage to pay. Cons ,you don't have feeling of safety and comfort of being homeowner. Keep investing into stock and not taking money out hypothetically a no loss scenario. Till the date of liquidation your gains and losses don't mean anything. So if you can stay invested it's all ok.