Taking Out a Mortgage To Buy Stocks Isn't Quite As Crazy as It Sounds
If you want to crank up your investment returns, take out a larger mortgage.
This isn't as crazy as it sounds -- and, for aggressive investors, it could be a savvy move, especially with mortgage rates still below 6%.
When investors look to boost performance, they usually try to pick market-beating stocks and funds or tilt their portfolio toward more-promising sectors. But if you ever take a college class on financial theory, you will hear about a radically different approach.
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Drawing on the work of three Nobel prize-winning economists, your professor will likely tell you that, if you want the highest possible return for a given level of risk, you should buy the most broadly diversified portfolio possible and then either add conservative investments to reduce volatility or borrow money to goose performance. I think this is an intriguing way to look at your finances. But the strategy comes with three key problems.
? Going global. What are the problems? First, it's hard to know what this broadly diversified portfolio looks like -- but it's pretty clear most folks wouldn't want to own it.
The so-called market portfolio is a value-weighted mix of the world's risky assets, including stocks, bonds, real estate, commodities, venture capital, collectibles and goodness knows what else. That might seem like a crazy agglomeration. But because it's so diverse, the overall portfolio shouldn't be that volatile.
Harvard Business School Professor Andre Perold is in the midst of researching what the market portfolio looks like. "If you don't own the entire market, you're betting against the guys who own the stuff that you don't," he notes. "What makes you so sure the other guys are stupid?"
Yet the portfolios held by most Americans look nothing like the market portfolio. For instance, if you followed a market-weight approach, foreign markets would account for half of your stock portfolio. How many investors are willing to invest that much abroad?
? Heading home. Still, if you grit your teeth, you could probably spread your bets a little more widely and get closer to the market portfolio. That brings us to the second problem.
According to the theory, if you want higher returns, you would use borrowed money to invest even more in the market portfolio. Borrow to invest? That no doubt conjures up images of gun-slinging hedge-fund managers and dice-rolling margin-account investors. But in all likelihood, you have done something awfully similar yourself.
After all, when you bought your house, you might have borrowed 80% of the purchase price. Indeed, let's say you have a $400,000 house, $320,000 in mortgage debt and $300,000 invested in stocks and bonds. You probably consider that mix pretty conservative.
In truth, however, your finances aren't that different from someone who has a $400,000 house with a $200,000 mortgage and a $300,000 portfolio partly financed with a $120,000 margin loan. After all, you both have $700,000 in total assets and $320,000 in total debt.
Nonetheless, you are probably uncomfortable with margin debt. And you should be. If you buy stocks on margin and the market crashes, you could be forced to pay down your margin loan -- and that might mean selling stocks at fire-sale prices.
"Having the mortgage is much less nerve-racking," says William Bernstein, an investment adviser in North Bend, Ore. "Your mortgage banker won't give you a margin call."
Therein lies an interesting opportunity for aggressive investors. Next time you buy a house, you might limit your down payment to 20% and then pour the extra money into your portfolio.
? Raising returns. There is, unfortunately, a third glitch. For individuals, a mortgage may be the cheapest way to borrow, especially once you figure in the tax deduction. Even so, a 30-year fixed-rate mortgage will cost you close to 6% today -- and the bonds in your portfolio probably won't perform significantly better, so the leverage isn't doing you any good.
To sidestep this problem, you might designate the broad stock market as the "market portfolio," suggests Roger Ibbotson, a finance professor and chairman of Chicago researchers Ibbotson Associates. From there, you can then adjust your mix to reflect your risk tolerance.
"Most people will lever down by buying bonds," he says. "But if you want to lever up, you could do it with your mortgage."
Keep in mind that borrowing at 6% to buy stocks is no slam dunk. Mr. Bernstein figures that, over 30 years and assuming historical stock-market volatility, there's a 25% chance that stocks will underperform your borrowing costs.
Moreover, even aggressive investors may not have the stomach for a 100% stock portfolio. To make the strategy palatable, you might invest 15% or 20% in bonds, which would crimp returns. Still, if you bought the bonds in a tax-deductible retirement account, the after-tax return should beat your mortgage's after-tax cost.
In all this, there is also a lesson for conservative investors. Suppose you have lent money to the bank, by stashing $100,000 in a savings account paying 2%, and you also have a $200,000 mortgage costing 6%.
We all tend to engage in mental accounting, viewing our home and mortgage as separate from our investment portfolio. But look at the big picture, and you will realize you owe more money than you are owed and you are paying a higher interest rate than you are getting paid. What to do? For starters, you might want to use some of your savings to pay down your mortgage.
用抵押贷款为投资助力
如果你想提高投资回报，不妨试试多申请一些抵押贷款。
这种做法施行起来并不像听起来那么疯狂，对于激进的投资者来说，这可能会是一项明智之举，特别是考虑到目前美国的抵押贷款利率仍低于6%。
每当投资者考虑如何提高投资回报的时候，他们通常会去寻找那些能跑赢大市的股票和基金，或者将投资组合向那些更有前景的类股倾斜。不过，如果你曾经在大学里学过金融理论的课程，你听到的将会是一种截然不同的方法。
你的教授可能会根据三位诺贝尔经济学奖得主的理论，向你传授这样的投资理念：如果你希望在一定的风险水平下获得尽可能高的投资回报的话，你应该确保投资尽可能地分散，之后或是加入保守的投资品种以减少波动，或是靠借款来提高回报。我认为这是一种审视财务状况的有趣方式。不过，这种策略存在以下三方面问题。
--全球分散投资。这样做有什么问题呢？首先，很难了解这样的投资组合会是什么样子，不过有一点相当清楚：多数人并不愿意持有这样的投资组合。
所谓的市场组合(market portfolio)指的全球各类风险资产以市值为权重构成的一个组合，包括股票、债券、房地产、大宗商品、风险资本、收藏品......天知道还有什么其他东西。这看上去似乎有些不可思议。不过由于这一投资组合相当地分散，它的波动总体上应该不会如此地剧烈。
哈佛商学院(Harvard Business School)教授安德烈?佩罗尔德(Andre Perold)正在对市场组合进行研究。他指出，如果你不是拥有整个市场，那么必然会有人持有你没有的投资品种。是什么让你如此确信他们的选择会是错误的呢？
不管怎么说，多数美国人持有的投资组合完全不同于市场组合。比如，如果以市场为权重来确定投资组合比例，那么外国市场投资应该占股票总投资的一半。可又有多少投资者愿意如此大手笔地投资海外市场呢？
--从按揭贷款下手。不过，如果咬紧牙关，你还是有可能将投资组合进一步地分散，并向市场组合靠拢的。而这又给我们带来了第二个问题。
根据上述理论，如果你想获得更高的回报，你应该用借来的钱在市场组合上做进一步的投资。借钱投资？这无疑让人想起对冲基金经理和保证金帐户投资者的形象。不过十有八九你自己已经做了一些这样类似的事情。
当你在购买房子的时候，房款的80%可能都是借来的。假设你有一幢价值40万美元的房子，抵押贷款为32万美元，同时你还有30万美元的股票和债券投资上。你可能认为这样的投资组合算是相当保守的了。
然而，与那些拥有一幢价值40万美元的房子，抵押贷款了20万美元，拥有30万美元的投资组合、且其中12万美元为保证金贷款的人相比，你们的财务状况可能没有多大的差别，毕竟你们的总资产都是70万美元，总负债也都是32万美元。
不过，保证金贷款可能会让你很不安心，你也的确应当如此。如果你靠保证金贷款买进了股票，而股市又一落千丈，你将不得不偿付保证金贷款，这可能意味要以极低的价格廉价卖掉你的股票。
投资顾问威廉?伯恩斯坦(William Bernstein)表示，抵押贷款就不会那么提心吊胆，你的抵押贷款银行不会向你下发追缴保证金通知的。
对于激进的投资者而言，这其中包含著一个有趣的投资机会。下一次你购买房子的时候，你可以将首付款比例限制在20%，然后把更多的资金投入到投资组合中。
--提高投资回报。不幸的是，这又出现了第三个问题。对于个人而言，抵押贷款可能是最为经济的借钱方式，特别是当你将税项减免因素考虑进来的时候。但即便如此，如今30年期固定利率抵押贷款的利率水平也已经接近6%，你投资组合中债券投资的回报率可能比这也高不了多少，因此，靠增加抵押贷款数额、而将更多资金用于投资的做法对你一点好处也没有。
Chicago researchers Ibbotson Associates主席、金融学教授罗格?伊博森(Roger Ibbotson)称，为了规避这一问题，投资者可以将整个股票市场看作是“市场组合”。在这一基础上，你再调整投资组合以反映出自己的风险承受能力。
他说，多数人会靠投资债券来调低风险，不过如果你希望承担更大的风险，可以借助抵押贷款的作用。
记住，以6%的利率借钱买股并不是一件轻松的事情。伯恩斯坦指出，在未来30年中，假设股市的波动状况与过去一致，股票投资回报率低于你的借贷成本的几率是25%。
此外，即便是激进的投资者可能也不会愿意进行纯股票的投资。为了使投资策略更合乎情理，你可能会将15%或20%的投资放在债券上，而这样做将会降低收益。不过，如果你是在减免税收的退休帐户中购买债券，其税后的收益应该能超过你的抵押贷款税后成本。
这里也有一条值得保守的投资者借鉴的经验。假设你把10万美元存在银行，存款利息是2%，你另外还有20万美元的抵押贷款，利息是6%。
人们往往习惯性地认为房屋、抵押贷款与投资组合是不相关的两件事情，不过，要是从总体来看，你会意识到，你欠别人的钱比别人欠你的钱要多，而你得到的利息却比你要支付的利息更低，那么该怎么办呢？你首先想到的可能就是使用部分存款来偿付你的抵押贷款。
