Mainly an investment term, Risk Parity is a strategy based on targeting risk levels across the various components of any portfolio. The risk parity approach to asset allocation allows investors to target specific levels of risk and to divide that risk to achieve optimal diversification for each individual investor.
Here's the problem: Housing is a single biggest asset that most of us own. Yet, most homeowners fail to see themselves as investors. Better yet, they fail to realize that a home is an investment too. The result is that we have homeowners with equity locked into homes and sitting with only one property to their name: Namely their principal residence.
The focus should be diversification. In addition to your primary residence, think of buying an investment property. It is easier than you think and usually requires way less money than you might imagine. Since everyone has different risk tolerance and because investing is not a 'one size fits all' formula, a close look at each individual situation is warranted. Should you wish to benefit, send me a quick email and we can consult one-on-one to determine an approach that is most suitable for you.
Formally educated as an Architect, Jagdeep Singh is a Toronto REALTOR™ consulting on both resale real estate and new developments. Powerful Local Focus on Real Estate with a Global Perspective™
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