Quote:
Originally Posted by squiggs96
The people that are investing in houses and using them as a bank account don't care if they have one house or three, as long as the return on investment is there. In Vancouver you get an increasing market, whereas in the States you get a decreasing market. In California you could own two houses, but that just means you have two houses going down in value instead of one house in Vancouver going up in value.
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In a changing world (just look at the last decade for an example), the riskiest assets are the ones that have a lot to lose. My prediction is that if you're just getting into the gold, silver, or Vancouver housing market, you will be taking part in the biggest losing transactions of the 2010s. Risk isn't binomial in which there is equal risk of things going down as they are going up. Relative to fundamentals the most expensive assets have a greater risk of going down than up and vice versa. As things grow in value their propensity to grow at the same rate diminishes. This happens at the same time that a high historcial growth rate is built into the current prices. Eventually, growth grinds slower and the PV impact of lower growth hammers the price of the asset, it's why value investors like Buffet stay away from stocks like Apple.