al_bundy said:
that's assuming you invest before the big runup. what if you had taken out a mortgage in 2003 and invested it all then and it's essentially flat until 2020? too much risk since if the value of your home falls and the Dow does one of it's scheduled 20% to 50% crashes and stays down for a long time and you have to sell your home for some reason than you could be in a world of hurt. what if you need a large chunk of that money for some reason while the market is crashing? if it was in equity you can always borrow it. if it's invested and currently a loss you have to wait and pray
You're preachin' to the choir, Al. Spouse and I built our portfolio from 1982-2002 and spent the last two years of that project wondering if we'd have to start all over again. We'd paid off several mortgages over the years and were actually debt free 1998-2000. BTDT.
The best advice I can give you is that all these questions have been discussed in previous threads that should be read. Pay attention to SG's posts because he's good at explaining probability, statistics, and the interpretation of the math. Look at the mitigating/safety factors I applied to our decision and, if you can't apply the same factors, then don't try this at your own home.
The simplistic answer is that a 30-year mortgage almost always gives you enough time to recover from a bear market-- especially when so many stock-market databases ignore the effect of reinvested dividends. If you're focused on that "almost" word then it brings the discussion to the same level as fallout shelters, MREs, shotgun shells, and random asteroid strikes. I can't reassure you. If you don't feel comfortable with a mortgage then don't do it.
I'm focused on the measures that can be taken to raise one's FIRECalc success rates and to minimize the risks. Going through your scary scenarios without a mortgage is worse than going through them
with a mortgage, and the FIRECalc math validates that counter-intuitive concept. Paying a fixed mortgage with declining dollars is wonderful, especially if you can collect a COLA pension or annuity. Putting the money in low-cost, reinvested index funds for three decades with a small-cap value premium just loads the dice in our favor.
But that's good enough for me. When I'm in Vegas I only play blackjack, too. You have to find your own comfort zone.