Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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"Everything will be all right in the end. If everything is not all right, then it is not the end." - The Best Exotic Marigold Hotel
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well i'd say it beats investing in housing for the short term
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Ed Tufte would get a kick out of this graph.
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A few thoughts:
1. Long term is going back to 2000. Really? Hard to take anything seriously after you see this.
2. Comparing returns on an unlevered home to stocks is sort of like comparing returns on bonds to stocks. This comparison is made all the time, but it makes absolutely no sense as it is far from apples to apples in terms of risk/volatility.
3. The last point is actually the most amusing since he actually came oh so close to getting this right with the following:
But unlike houses, many stocks pay dividends (especially in the large-capitalization S&P 500), which changes the return calculus yet again.
But of course, this too was a complete whiff as the writer completely missed the "dividend" that houses pay in terms of imputed rent.
So aside from the above, the grammar seemed sound and the graphics were nice. That's about it for the positives. Really makes you wonder about the qualifications of those that become a senior writer at "think" tanks like Pew. How did this article come to exist? Did he suddenly feel that he had some great insight into housing? But insight would imply that that it was preceded by some amount of genuine thought. Unfortunately, there is no evidence of that.
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