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Subject:  Re: OT: KISS Date:  8/10/2002  9:48 PM
Author:  FoolMeOnce Number:  73441 of 883341

Several valid comments have been made about the local nature of real estate. I agree. It is difficult to diversify individual real estate holdings. If you are not comfortable investing in your own area, then by all means don't.

For me it comes down to this: If you buy individual properties, there is a small chance that you will experience any kind of dramatic loss of valuation. If you are truly investing in properties whose income characteristics make sense and not merely speculating, the chance is even smaller. If you invest in the S&P 500, a dramatic loss of valuation from time to time is a near certainty. This is a real problem in the shortened accumulation phase available to prospective early retirees.

If the risk of dramatic loss was anything near as high as one might be led to believe by the various horror stories, I would doubt that roughly 7 out of 10 families would own their own homes.

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