The generation that bought houses in the 90s saw their wealth increase rapidly, as the house prices went up. The main reason for their high returns was leverage (and they were lucky the house prices kept going up).
Now, house prices seem less affordable and it seems less likely they will keep going up, with yields already low and near zero interest rates.
But there is nothing special about housing, right? Can we use leverage to get higher returns in other asset classes, e.g. equities, using a form of a tangency portfolio? If we are investing for the long term, and index investing gives positive returns over any 20 year period, why is it not a good idea or is not practical?
Submitted June 25, 2017 at 01:56PM by Agent008t http://ift.tt/2sG336g
