This weekend is the Superbowl, and I will be making another “lock” prediction at the bottom. More astute readers will recognize the tenuous nature of my “locks” historically, so buyer beware.
I found an interesting chart, that is helpful when I get questions about: “is this a good time to buy a house, now that interest rates are high”, vs “Is this a good time to put more in the market, now that it seems to be stable.”
If there is one take-away to be mindful of, it's that the time horizon matters the most in all investment decisions:
I appreciate this chart. In many ways, buying a primary residence vs investing in equities have the same essential questions that need to be explored before deciding what and when to “invest”, and how much, and for what purpose.:
- How long do I intend to stay invested: for the house or portfolio?
- If the value went down 10-20% in any one year, would this fundamentally alter my long-term objectives?
- Am I using too much leverage for either the purchase of home, or investing?
- Is purchasing a home, or setting money aside to invest going to severely impact other things in my life: day to day expenses, down-side protection etc.
Of course, there are trade-offs and differences between the stock market and real-estate. I always say: “we don’t pull up to our driveway and see a screen that shows the current price of our house on a daily basis, and whether its up or down”. Real estate and stocks aren’t mutually exclusive: they both play critical roles when accumulating wealth long-term. Many of you have gone through financial plans with us: it’s the combination of growth in real-estate and our investments that determine our long-term objectives.
This is a good tie in to the next of our series of presentations. On March 29th from 4:00-5:00 EST, we’ve got two great speakers: what to do and how to plan for your principal residence, and other investment or recreational properties, as well as family-owned businesses, investment portfolios and legacies in the context of Wills, Estates, Trusts, being an executor, etc . Stay tuned for more information. One day, post-covid, we would like to hast something in-person...
Back to the Superbowl: of course, they too are not immune to inflation: The average cost of a ticket this year is $6,382. The cost of a 30-second Superbowl ad has hit a record $7MM! (I’m old enough to remember when the ads crossed the incredible $1MM mark) Interestingly, the price of chicken wings, which apparently has gone down 39% year over year, I will be buying this weekend.
It’s going to be an exciting game, Rihanna is going to put on an amazing half-time show, and the Philadelphia Eagles are going to win on the last play of the game: that’s a “lock”!
Have a great weekend.