I'm not bashing anyone. A healthy debate is finally taking place here.
If you don't like my wording of looking at something in 3d,
then I will rephrase it for you.
When you look at a graph of a stock and it has been going up, you say , hey I will invest in something like this and I will use margin as in the long run I will make a fortune.
What people don't realise is the GEOMETRIC MEAN.
The fluctuations will wipe out your margin and you will get a margin call. Double edge sword.
Resi Property can fluctuate all you like. If you are making your re-payments, your loan won't get called in if the price has fluctuated. In the long run the Banks know it will be worth more due to their money system. It is engineered that way.
Not so for commercial, and that's why commercial loans get looked at every 3-5 years.(Rolled over) You can pay a premium Interest Rate so it gets looked at and rolled over in 7-10 years but not common practise in Australia.Handy if you know a down turn is coming.
