“Whining Homeowners”

[NeetaT]

I’m actually getting tired of whining homeowners. They act as though losing money is unusual. If they want to here unusual, I have something for them. I have saved money all my life via low risk highest interest I could procure. I am now leaps and bounds ahead of the people I know. I thought if I did everything the opposite of everyone else, I would come out ahead and I have so far. Well I recently made a bone-head move by buying a hefty allotment of overseas fund shares. I thought, how risky could this be? I figured that I am going one step in risk above an interest bearing asset. I also thought I was being crafty by maybe outsmarting the U.S. stock market. After all how risky could a mutual fund be? Of course a week after I plunge into the low risk mutual fund, it drops 10% in one day. I then, of course after the fact, looked at the long term historical trend and it showed the fund taking five years to recover after it’s last 10% drop. The point I’m trying to make is losing money is losing money anyway you look at it. Just because it was lost via real-estate doesn’t make it special at least in my eyes. After all, who has ever heard of a mutual fund plunging 10% in one day?

[HLS]

I talk to a lot of homeowners and don’t hear much whining.

I hear mostly denial or nothing, as they are in shock when I tell them what the current comps are in their area.

Perhaps they whine to their family, friends or neighbors, and it could be one of those people that put them into their crappy loan.

If they are whining about losses now, expect them to be crying at this time next year.

[HLS]

I talk to a lot of homeowners and don’t hear much whining.

I hear mostly denial or nothing, as they are in shock when I tell them what the current comps are in their area.

Perhaps they whine to their family, friends or neighbors, and it could be one of those people that put them into their crappy loan.

If they are whining about losses now, expect them to be crying at this time next year.

[HLS]

I talk to a lot of homeowners and don’t hear much whining.

I hear mostly denial or nothing, as they are in shock when I tell them what the current comps are in their area.

Perhaps they whine to their family, friends or neighbors, and it could be one of those people that put them into their crappy loan.

If they are whining about losses now, expect them to be crying at this time next year.

[HLS]

I talk to a lot of homeowners and don’t hear much whining.

I hear mostly denial or nothing, as they are in shock when I tell them what the current comps are in their area.

Perhaps they whine to their family, friends or neighbors, and it could be one of those people that put them into their crappy loan.

If they are whining about losses now, expect them to be crying at this time next year.

[HLS]

I talk to a lot of homeowners and don’t hear much whining.

I hear mostly denial or nothing, as they are in shock when I tell them what the current comps are in their area.

Perhaps they whine to their family, friends or neighbors, and it could be one of those people that put them into their crappy loan.

If they are whining about losses now, expect them to be crying at this time next year.

[patientrenter]

NeetaT, I think there WERE, in the past, some differences between buying a home and making any other investment. In the past, home prices were a much lower % of incomes, and most of the decision about how much to spend on a home was connected with how nice a place you wanted vs how much of your income you wanted to spend on it.

In recent times, buying a home for most people means paying a price that is many, many multiples of their discretionary after-tax income. Therefore, it has become more of a speculative asset purchase in places like So Ca. With loans offering less than 20% down and low initial monthly payments, it’s even done with extreme leverage, so it’s become an EXTREMELY speculative transaction.

Your emerging market investment may not be any more risky than a typical home purchase, especially if it’s for less than a typical home’s price. If homes could be bought and sold on an open market like the stock markets, then the price you’d get for selling a home within 10 seconds might indeed go up and down as much as the stock market. The market for homes is not very liquid/efficient, so you can’t see the second-by-second impact on prices of sentiment and market information. In other words, the underlying volatility of the market for homes may be just as high, but no one tells their agent to sell their home in 10 seconds, so the impact of the volatility is not as obvious. If you were to sell your stocks using the same method you use to sell a house, fixing a price and waiting a few months at a time to see if it sells at that price, then the stock market wouldn’t seem as volatile as it does.

Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?

Patient renter in OC

[patientrenter]

NeetaT, I think there WERE, in the past, some differences between buying a home and making any other investment. In the past, home prices were a much lower % of incomes, and most of the decision about how much to spend on a home was connected with how nice a place you wanted vs how much of your income you wanted to spend on it.

In recent times, buying a home for most people means paying a price that is many, many multiples of their discretionary after-tax income. Therefore, it has become more of a speculative asset purchase in places like So Ca. With loans offering less than 20% down and low initial monthly payments, it’s even done with extreme leverage, so it’s become an EXTREMELY speculative transaction.

Your emerging market investment may not be any more risky than a typical home purchase, especially if it’s for less than a typical home’s price. If homes could be bought and sold on an open market like the stock markets, then the price you’d get for selling a home within 10 seconds might indeed go up and down as much as the stock market. The market for homes is not very liquid/efficient, so you can’t see the second-by-second impact on prices of sentiment and market information. In other words, the underlying volatility of the market for homes may be just as high, but no one tells their agent to sell their home in 10 seconds, so the impact of the volatility is not as obvious. If you were to sell your stocks using the same method you use to sell a house, fixing a price and waiting a few months at a time to see if it sells at that price, then the stock market wouldn’t seem as volatile as it does.

Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?

Patient renter in OC

[patientrenter]

NeetaT, I think there WERE, in the past, some differences between buying a home and making any other investment. In the past, home prices were a much lower % of incomes, and most of the decision about how much to spend on a home was connected with how nice a place you wanted vs how much of your income you wanted to spend on it.

In recent times, buying a home for most people means paying a price that is many, many multiples of their discretionary after-tax income. Therefore, it has become more of a speculative asset purchase in places like So Ca. With loans offering less than 20% down and low initial monthly payments, it’s even done with extreme leverage, so it’s become an EXTREMELY speculative transaction.

Your emerging market investment may not be any more risky than a typical home purchase, especially if it’s for less than a typical home’s price. If homes could be bought and sold on an open market like the stock markets, then the price you’d get for selling a home within 10 seconds might indeed go up and down as much as the stock market. The market for homes is not very liquid/efficient, so you can’t see the second-by-second impact on prices of sentiment and market information. In other words, the underlying volatility of the market for homes may be just as high, but no one tells their agent to sell their home in 10 seconds, so the impact of the volatility is not as obvious. If you were to sell your stocks using the same method you use to sell a house, fixing a price and waiting a few months at a time to see if it sells at that price, then the stock market wouldn’t seem as volatile as it does.

Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?

Patient renter in OC

[patientrenter]

NeetaT, I think there WERE, in the past, some differences between buying a home and making any other investment. In the past, home prices were a much lower % of incomes, and most of the decision about how much to spend on a home was connected with how nice a place you wanted vs how much of your income you wanted to spend on it.

In recent times, buying a home for most people means paying a price that is many, many multiples of their discretionary after-tax income. Therefore, it has become more of a speculative asset purchase in places like So Ca. With loans offering less than 20% down and low initial monthly payments, it’s even done with extreme leverage, so it’s become an EXTREMELY speculative transaction.

Your emerging market investment may not be any more risky than a typical home purchase, especially if it’s for less than a typical home’s price. If homes could be bought and sold on an open market like the stock markets, then the price you’d get for selling a home within 10 seconds might indeed go up and down as much as the stock market. The market for homes is not very liquid/efficient, so you can’t see the second-by-second impact on prices of sentiment and market information. In other words, the underlying volatility of the market for homes may be just as high, but no one tells their agent to sell their home in 10 seconds, so the impact of the volatility is not as obvious. If you were to sell your stocks using the same method you use to sell a house, fixing a price and waiting a few months at a time to see if it sells at that price, then the stock market wouldn’t seem as volatile as it does.

Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?

Patient renter in OC

[patientrenter]

NeetaT, I think there WERE, in the past, some differences between buying a home and making any other investment. In the past, home prices were a much lower % of incomes, and most of the decision about how much to spend on a home was connected with how nice a place you wanted vs how much of your income you wanted to spend on it.

In recent times, buying a home for most people means paying a price that is many, many multiples of their discretionary after-tax income. Therefore, it has become more of a speculative asset purchase in places like So Ca. With loans offering less than 20% down and low initial monthly payments, it’s even done with extreme leverage, so it’s become an EXTREMELY speculative transaction.

Your emerging market investment may not be any more risky than a typical home purchase, especially if it’s for less than a typical home’s price. If homes could be bought and sold on an open market like the stock markets, then the price you’d get for selling a home within 10 seconds might indeed go up and down as much as the stock market. The market for homes is not very liquid/efficient, so you can’t see the second-by-second impact on prices of sentiment and market information. In other words, the underlying volatility of the market for homes may be just as high, but no one tells their agent to sell their home in 10 seconds, so the impact of the volatility is not as obvious. If you were to sell your stocks using the same method you use to sell a house, fixing a price and waiting a few months at a time to see if it sells at that price, then the stock market wouldn’t seem as volatile as it does.

Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?

Patient renter in OC

[NeetaT]

“Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?”

Thanks, I will definitely consider the salutary advice!

[NeetaT]

“Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?”

Thanks, I will definitely consider the salutary advice!

[NeetaT]

“Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?”

Thanks, I will definitely consider the salutary advice!

[NeetaT]

“Finally, NeetaT, I would suggest not investing in “hot markets”. If prices in a stock market segment (like emerging) have gone up 400% in 3 years, then you should exercise the same caution you would for real estate that’s gone up by 400% in a short time. Maybe find something less trendy. You seem to have gone from the most cautious investment – CDs and the like – to volatile “hot” stock funds in one step. Why not aim to diversify by buying, slowly, various stocks/funds that are focused on different things, and maybe emphasize dividends to give you a back-up reward in case prices go down?”

Thanks, I will definitely consider the salutary advice!

[Author]

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