🚀 go-pugleaf

In article <coon3vso9jmj9v486p1hdo536ffdrjn9di@4ax.com>,
Scott in Aztlan  <Newsgroup> wrote:
>On Sat, 1 Feb 2003 06:21:41 +0000 (UTC), don@manx.misty.com (Don
>Klipstein) wrote:
>
>>  Real estate will not spend decades on end giving double-digit annual 
>>rate of return.  
>
>OK, since you bring it up, here's your turn to jump into the pool: 
>
>Let's have your prediction on when the SoCal housing price bubble will
>burst. Another poster from Pasadena already has 5 years, and Kenneth
>has picked 3 years. What's your choice?

Well, I won't try to pick a time.  Trying to time a market is a fool's
game unless you spend at least 4 hours a day studying that market.
But *historically* real estate prices have tracked inflation *over the
long term*.  You may get enormous gains for one or two or even five
years, but sooner or later it averages out, and you never know when
that will happen.

Also historically a diversified mix of stocks, chosen with careful
regard to the quality of management (or even just watching the
long-term behavior of the mutual funds you choose) will return 10-15%
per year.

So stocks beat residential real estate as an investment.  But real
estate is a fine inflation hedge, *and* you get to live in it while
you're paying for it.  If you get a long-term loan at a nice low
interest rate (like now) and can hold on for a decade or two, you're
likely to make out well because inflation won't stay low forever.
(Consider the effect of having a nice war while simultaneously cutting
taxes and doing almost nothing to reduce domestic spending, for
example...)  

There aren't many things that will go up in value while you use them,
and adding in the low rates for real-estate loans, a house is a pretty
good part of a nice diversified investment mix.  I just don't think it
should be your *only* "investment".
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