Good point tdma.
Why are some non homeowners begrudging equity gains in houses while boasting about big paper profits in stocks?Nobody is wishing for a crash in that market so we can buy in a 50 cents on the dollar.
Same with my pension.
Certainly a lot of bear envy going on here. The attitude is petty and childish...like I have ice cream, and they throw a tantrum because they have cotton candy but really like ice cream better.
I bet its because they dont have the cotton candy they say they do LOL
No one is begrudging any gains anywhere, and there is no envy - why do you always fall back to the envy argument when you don't want to justify or defend your own comments?
You made a statement that the stock market is going suddenly disappear, "stampede for the doors", "don't be left holding the bag", "day of reckoning"... while naively assuming that while this catastrophic economic event happens, your home value and pension will remain intact and see you through retirement. I'm just trying to understand how you manage to reconcile those 2 very different worlds, and point out that you don't actually seem to understand the value of the stock market, or what it means to your way of life - and therefore how ridiculous your statements sound.
It's quite transparent that ETB and TDMA speak before they think, they aren't the sharpest tool in the shed.
These guys have no idea how markets work, but they sure talk a lot about it.
Comparing housing to stocks as an investment vehicle thinking they are market geniuses because they bought a home and the prices went up. ReallyReal said it best, people get confused with skill and luck, it's like rolling a 6-sided dice and calling an odd number, and when a 3 comes up they boast about it and call it genius.
It's clear to everyone in this board that these two have no idea how stocks or markets work.
If you want to compare housing to a stock, you need to look at housing as a highly leveraged investment (i don't advice in looking to housing as an investment but each to their own).
To get in position you only need 20%. So the leverage is 5 to 1.
If you buy a 1,000,000 dollar home with a $200,000 down-payment and say your house goes up 10% in a year, the new worth is 1,100,000. You're up 100,000 from your 200,000 investment. this means a 10% increase in the "stock" (home in this case) has given you a yield of 50% increase from y our 200,000 down payment (50% to 10% thus 5 to 1 leverage).
Conversely, if the house goes down by 10%, the house is worth 900,000. Which means you are down 100,000 from your initial 200,000. A 10% decrease in the stock resulted in a 50% loss in comparison to your down-payment (again 5 to 1 leverage).
Keep in mind this is not putting into account the monthly mortgage payment, which will decrease the leverage, but it's highly leveraged none the less.
Now if you compare this to the s&p500 index (since ETB is looking for a portfolio that can outperform housing), from 2009 to today, the S&P 500 has tripled(300%) in price.
A 5 to 1 leveraged investment in the S&P500 from 2009 would have yielded %1500 gain (5 x 300%) which significantly outperforms any real-estate market anywhere.
As for money disappearing from the stock, that's just plain lack of knowledge and ETB just being... ETB.
You can set STOPS to manage your risk. Stops let you auto-sell your position if the price goes down by a certain amount.
I don't expect ETB to understand this post, I just want to put some perspective into this discussion.