The Impact of the Single-Family Home on Portfolio Decisions
DOI:
https://doi.org/10.61190/fsr.v12i3.4765Keywords:
Mean-variance optimization, Home ownership, Portfolio choiceAbstract
This study examines the impact of the single-family home on on a family's optimal asset allocation decisions. Many researchers have studied individual investor portlolio allocations to stocks and bonds, but there has been little work examining how home ownership should affect those decisions. We believe the family home and any related financing should be considered part of the portfolio. Using a mean-variance utility function, we examine the effects of home ownership on the portfolio allocations to stocks and bonds. Failing to include the home and its financing can have a major impact on the optimal asset allocation strategy for a family.
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Copyright (c) 2003 Academy of Financial Services
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