If you got a million in home equity not being exposed to market changes that are correlated to the value of the equity is smart.
I am going from having 80% to 40% of my liquid assets in stocks to reduce risk since I am getting another property.
I do think both stocks and San Diego RE are undervalued however. Lower rated bonds as well.
My junk bond funds have dutifully paid me 8 to 10 percent interest and appreciated 20-30%. Energy is the only sector with defaults these days and natgas has gone up more than 50% from last year’s lows.
To cover really bad situations I have cash, metals, stockpiled supplies, and S&P 500 puts that are way out of the money.
