Ok what you can do is borrow margin out of your stock to pay for the house. That way you can doubly benefit by leveraging more debt.
Diversification is good policy. Imagine you were in 1996. Tech stocks were doubling every year. You cashed out some gains from the stock market and bought a house in Palo Alto. Friend told you you were an idiot. Why would you move money from fast growing asset aka tech stocks into slow boring asset like real estate?
You did that in 1996, then 1997, 98, 99 and 2000. The gain were so good in the final 2 years you managed to buy not one but two houses. Altogether you accumulated 7 houses in Palo Alto. You only have 2 millions in total assets but your smart friend had 10m in Cisco stocks. He kept mocking you.
Then the bubble bursted.
Did you miss one step? Your friend cashed out CSCO just before the crash and bought 35 houses
Ok even back then Palo Alto houses weren’t that cheap…
That’s market timing.
Forgot to add this: I think we are in 1996 2.0.
When market is about to crash within 1-2 years, there are usually some signs. Just like now. Bitcoin and hardly any 3-5% correction of indices… crash within 1-2 years is very likely. Can’t tell much more accurate than that. That is, the idea of moving stocks to RE may be the right thing to do if not heavily leveraged. Stocks can theoretically and some do lose 100% while SFHs in fortress usually don’t decline more than 15%.
If you are a buyer/holder, and use debt, you can be the king with both real estate and stocks. You can buy as much debt as you can at a relatively high interest after a crash, and you’d make bank.
Buy hold, in most markets is a good strategy. We have nimbys that prevent new construction, limited real estate around business centers and so on.
For stock market, the GDP grows, so does the market. Buy ETF, constantly, and you’ll still be ahead big time. You don’t have to be 100M$ rich, being 20M$ rich is sufficient for most people.
4 more good years So should ride the market for another 3 years before cashing out to buy houses. Just do what wuqijun did, buy 10-20 houses within 1 year.
My fortune sphere says 2.
Edit: Crystal ball, YES!!! For some reason, couldn’t remember what it was called!
I don’t have crystal ball. 4 more good years is only my guess. Could be 12 months or 12 years. Who knows. Just have some discipline will help no matter what.
This is a real estate forum. Stocks have only been good since 2009 . Were shit for 9 years before. Ca RE has been a sure bet since 1849 except in 2005-2007… As long as you did not buy in those 3 years you would have always been better in CA RE instead of stocks. Remember we are talking total return on leveraged appreciation and rental cash flow.
Now stocks have been amazing since 2009. 4x return
Unique in history… can’t last. Besides in most cases the stock market averages didn’t beat inflation if you bought and held since 2000…
I got enough rentals as is. Don’t need more. I would only buy these days when a real good opportunity presents itself… such as something I bought this year that is 30% below market value…
RE and Stock prices too high… Bitcoin here we come… lol
OMG, hanera ! I am on the opposite spectrum.
@hanera usually says something and does the exact opposite… I wouldn’t take his words literally…
I said things that are correct for many, that does not mean is correct for me. Obviously I won’t sell any stocks to buy RE but would continue to snap up good rental SFHs in Austin😀
I’ve honestly never heard of BTIG. I’m amazed they could have such an impact. I wonder if this will be like Andrew Left’s call on UBNT and SHOP.