The argument is that home ownership isn't a worse risk-adjusted investment than stocks. If you know how to reduce risk in the stock market without correspondingly reducing your returns, do share.
I believe that is also not true. Case Shiller is up barely ~x3 since 1990 including the recent large bump [1]; SP500 appears to be ~x12 since 1990.
Inflation-adjusted, according to Wikipedia, Case Shiller National index is up ~25% since 2000.
Also, extreme risks is not what most people aim for in investing when most of their net worth is involved; the utility of money is not linear.
> If you know how to reduce risk in the stock market without correspondingly reducing your returns, do share.
If you want to do it without reducing your expected returns you diversify to products with similar expected returns and, to the extent practical, mutually independent risks.
I don't see how this can be true. If you're splitting your investment, your downsides are smaller but your upsides are also smaller, and presumably by the same amount.
> If you’re splitting your investment, your downsides are smaller but your upsides are also smaller, and presumably by the same amount.
Yes, and your expected return remains the same. Reducing variability isn’t “reducing returns”, because, as you note, what you lose from reducing the 50+nth percentile returns is made up for by increasing the 50-nth percentile returns.
