Shorting the housing market
Now here's an investment idea for the down market. For the average person in the US and UK, much of his or her wealth is tied up in a house. That breaks portfolio theory, which advises a diversification of investments. But government tax treatment of property ownership warps decisionmaking. Here's one way to get the balance right, and keep the tax benefits of property ownership: spread betting. IG Index has introduced a tradeable bet on the average house price in the UK. There was pretty much no way to do this before; I checked. It's particularly useful now, with UK house prices teetering on the edge of an ugly correction. So here's an idea: take out a short -- bet on a decline. That will ease the pain if house prices collapse. If they continue rising, a capital gain on the actual property will provide consolation. Shorting the housing market might seem a risky act; in fact, it's insurance, and the only responsible thing to do. IG Index House prices#
