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Loriana Pelizzon Guglielmo Weber6fnD$ !>E 2 A discussion by: Vicente Cuat Univ. Pompeu FabraX3C CcCC|4Approach \Test whether household portfolios are efficient in a mean-variance setup, conditional on housing position Housing position includes ownership and discounted future needs as a liability Depending on net position home ownership is a net asset or a hedge against rent needs Empirical negative correlation between housing and financial excess returns 2\\"xApproach }Households have some housing needs Treat house ownership as a position in rents Housing is a relatively illiquid asset, agents are unlikely to adjust it very often While the discounted future rent needs of a household may vary continuously, the adjustment of housing wealth is likely to be infrequent The gradual evolution of human capital also may make the optimal portfolio drift~Z~,}Approach As housing needs change over the life cycle of a household, housing positions are likely to be imperfect hedges of housing rent, households may be underhoused or overhoused Financial portfolios may be used to (imperfectly) hedge against unhedged housing risk, O  9Approach The optimal position in financial assets would crucially depend on whether the household overhedge or underhedge in housing wealth Financial assets help diversify both positive and negative positions, however, due to negative correlation higher optimal weight in risky assets for overhoused households Financial portfolios that may seem inefficient by themselves may prove efficient as they serve as a hedge for housing wealth (and vice versa)CEmpirical Results,Households that are underhoused seem to be the ones that are closer to the efficient portfolio. I.e. a portfolio with a relatively low amount of stocks Households that are overhoused are the ones with least efficient portfolios. They are the ones that hold more stock, but well below what they should&-,  bDiscounted Future Rent NeedsA DDiscounted Future Rent NeedsA GDiscounted Future Rent NeedsA d5Home ownership leads to additional borrowing capacity66ABuying a home is typically a highly leveraged operation, at least the first one Households have rarely access to unsecured loans at low rates It is only when they own a home that they can borrow at (close to) risk-less rates Mortgage loans have relatively low risk and it is highly correlated with the performance of the individual portfolio so if anything the residual risk provides a hedge8ZAC C=Cf An Example  A /~ An Example A k An Example A l An Example A g An Example A 5 An Example A 1 An Example A = An Example A K An Example A L An Example A hThe asset sideA OThe asset sideA iThe asset sideA PThe asset sideA 3First and second order effects  A n(Indivisibility Plus Access to Borrowing ))AIThe access to additional funds associated with buying a house is likely to play a role Large discontinuities in feasible housing portfolios due to indivisibility, illiquidity and leverage Some combinations of housing wealth are effectively unfeasible home owners and the ones that do not borrow at all may behave very differentlyJJC I.Housing wealth is illiquid in a particular way//ARound trip costs of buying a home and selling it back 7% to 15%. Equivalent costs for a mutual fund 1% to 4% Hedge funds 2% to very high costs 20% or higher Effectively higher adjustment costs, that would justify lower updating, but not many orders of magnitude higher . Cc.Housing wealth is illiquid in a particular way//AHowever, one key characteristic is the indivisibility of housing wealth One can sell partially a mutual fund, but a house is hard to sell partially Selling a large house to buy a smaller one would have a transaction cost on the whole value of the house This is similar to illiquidity, but not exactly the same. For example multiple home owners should behave very differently to single home owners tZ'CCCCZCC8C;Some other comments AThe period chosen to compute housing returns may matter a lot. The Present Value of Rent is calculated as if it was the effective need for rents. However this is a constrained optimum due to illiquidities. True needs are probably sharper The representative agent is also likely to smooth things With high discount rates should also give a  sharper profile, (clarify discounted PVH) 2CC, ? Summing up  A8Nice paper! Complex but simple message Approaches a complicated problem through a very natural way (portfolio theory + short term fixed housing + gradually changing housing needs) Good mix between theoretical background and empirical implementation Results are convincing and improve on pre-existing literature 288CC@Summing up: Issues sideA1Housing wealth is treated as too fixed, a complementary paper on housing decision is needed Mortgages and access to finance are likely to play a large role and the approach in the paper is not rich enough to capture this More of a life cycle approach, follow portfolios before and after trading up (down) 211CC/dC}1hijlmnorsv#-0247:<>ABEFHJMNQRS  ` ff3ff` JMMM3ff` @@ff3̙3` fMMM3f3f3` fff333` 3ffMMM` 33f3___>?" dP@ ?nKd@`d  @` n?" dd@   @@``PT    @ ` `-p>>L0 5- 8(  8 8 6t=  "*P`   U!Click to edit Master title style " "$ 8 0 @  "P`p   RClick to edit Master text styles Second level Third level Fourth level Fifth level!     S 8 6F  "`P`   X* *  8 6pJ  "`     dEfficient Portfolios& - Discussion by Vicente Cuat33   8 6N  "``   Z* lB  8 6DԔ?"O`H 8 0޽h ? fMMM3f3f380___PPT10.  O RefinedE L0 @ <-(  < < 6̡  "\   T Click to edit Master title style! ! < 0h  "0 `     W#Click to edit Master subtitle style$ $ < 6  "`R`   X*   < 6X  "`    Z*   < 6б  "fd   Z* `B  < s *Do"H < 0޽h ? fMMM3f3f380___PPT10.  O)0 `T9(  T T N qڸqڸ (    p*   T**TT~~ T Ndd qڸqڸ & (   r*   T**TT~~d T c $ ?   M T N@_ qڸqڸ 6 X   kHaga clic para modificar el estilo de texto del patrn Segundo nivel Tercer nivel Cuarto nivel Quinto nivel7    l  T T@ qڸqڸ l    p*   T**TT~~ T TD qڸqڸ l&    r*   T**TT~~H T 0ηo~ ? ̙3380___PPT10.Jzp  $(  $  $ Ne yļyļ .    v* a00aa $ N> yļyļ 3 .   x* a00aa $ T4I yļyļ q    v* a00aa $ TS yļyļ q3    x* a00aaH $ 0ηo~ ? 3380___PPT10.M L0 00(  x  c $( <`p   x  c $( <0     H  0޽h ? 33___PPT10i.Ѻ k+D=' = @B + 1L0  % pd0(  dx d c $ 8P    x d c $| 8P`   H d 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0  % 0(  x  c $ 8P    x  c $ 8P`   H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0  % 0(  x  c $ 8P    x  c $l 8P`p   H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0  % ,0(  ,x , c $( 8P   x , c $8 8P   H , 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0  % pT0(  Tx T c $ 8P    x T c $ 8P`p   H T 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + hL0 +(  x  c $S 8   J  3 "A?Graph03@p!  Nt  Ԕ?" 9These are annual equivalent of the future discounted rent needs of a representative household This is the profile, but there is a risk that the whole thing goes up or down, plus an expected growth rate If housing transactions were frictionless, these would be the desired housing sizes purely for hedging motives.,: n2) : H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0 \1(  \x \ c $z 8   J \ 3 "A?Graph03@p' \ N  Ԕ?"d QNote that the housing consumption needs are surely a less smooth version of this profile. However the paper assumes a frictionless rental market. A way to see it is that you buy one home that hedges your housing needs and rent it to someone else, then rent your own house (and continuously adjust). Plus you may want to invest in housingR n2R R H \ 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +g L0 f^d(  dx d c $ 8   J d 3 "A?Graph03@p d N  Ԕ?"  `Note that it is a very flat profile!! By buying a 700 (?) home the household is nearly hedged for life Buying a house of 680 and trading it up for another one of 710 gives a better hedge, but surely not worth it given transaction costs. Why are not all agents buying a 700 home? n2  H d 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + jL0 P0(  x  c $0 8   x  c $ 8P   H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + lL0  { p  (  x  c $6 8   B  ZDԔ?"@B  ZDԔ?"`  Z8  Ԕ?#"  7~ \E(R)(n   Z>  Ԕ?#"  W R(n     Z#  Ԕ?#"  w ^  nRf.(n    c j0e0e    BpCDE(F A@  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B   TDԔ?"`    ZB Ԕ?#"   `  F(n   ZU  Ԕ?#"   R  Yh(n   NY  Ԕ?#"   .  HSuppose that a young household with a sum of wealth of euro 50k. It faces borrowing constraints Point h represents investment in housing. The household has naturally a large negative position in h several times larger than its net financial wealth How can we represent this? n2H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +  L0   > (  x  c $c 8   B  ZDԔ?"i   ZTe  Ԕ?#"  ~ \E(R)(n   Zi  Ԕ?#"   p =  R(n    ZTm  Ԕ?#"  @'  nRf.(n    ZI Ԕ?#"  Y` F(n    ZM  Ԕ?#"  R Yh(n W   N8S  Ԕ?#"   r How can we represent this? It is like short selling several times their total wealth in housing and putting the proceeds in the risk free asset n2B   ZDԔ?"P p P B @ TD8c?"pB  TD8c?"p@  Z$Y Ԕ?#"  2nb F(n   Z\  Ԕ?#"   l YH(n   N``  Ԕ?"   cEffective position in h(n2  H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + rL0 43(  4x 4 c $f 8   B 4 ZDԔ?"@B 4 ZDԔ?"` 4 Zh  Ԕ?#"  7~ \E(R)(n  4 Zn  Ԕ?#"  W R(n   4 Zp  Ԕ?#"  w ^  nRf.(n  4 s p0e0e    BpCDE(F @  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B  4 TDԔ?"`    4 ZN Ԕ?#"   `  F(n   4 Z  Ԕ?#"   R  Yh(n   4 N  Ԕ?#"  0     Not feasible (n2 4   4 N&  Ԕ?#"  P7  Not feasible (n2 4 B 4@ ZDԔ?" P B 4 ZDԔ?"p0  4 N(|  Ԕ?#"     f0Putting all their wealth in housing is not feasible, as there are no houses of 50k. The unconstrained  market portfolio is even less feasible (i.e. You need to find a house worth say 5k). Furthermore, this would be inefficient as it does not take into account the big negative h n2B 4@ ZDԔ?"p H 4 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +y sL0 xp<(  <x < c $ 8   B < ZDԔ?"@B < ZDԔ?"` < Z~  Ԕ?#"  7~ \E(R)(n  < Z  Ԕ?#"  W R(n   < Z  Ԕ?#"  w ^  nRf.(n : <  0e0e    BpCDE(F   1 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B  <  `D1?"`    < ZD Ԕ?#"   `  F(n   < Z`  Ԕ?#"   R  Yh(n   < N .  Ԕ?#"  0     Not feasible (n2 4   < Nh0  Ԕ?#"  P7  Not feasible (n2 4 B <@ ZDԔ?" P B < ZDԔ?"p0  < N|5  Ԕ?#"     tOne possibility is to invest in a combination of the market portfolio that excludes housing and the risk free asset This will provide some hedge but is unlikely to be the most efficient option The household is massively underhoused, it would still have a large negative position in h. n2 6B < TDԔ?"   < s p0e0e    BpCDE(F @  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`@  < NdF  Ԕ?#"  0 p  bFeasible (n2  B < ZDԔ?"P 0   < ZX< Ԕ?#"   P@  F(n  < Z`C  Ԕ?#"   P  Yp(n H < 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +) mL0 (  (   x   c $$w 8   B   ZDԔ?"@B   ZDԔ?"`   ZXx  Ԕ?#"  7~ \E(R)(n    ZA  Ԕ?#"  W R(n     Z4p  Ԕ?#"  w ^  nRf.(n    s p0e0e    BpCDE(F @  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B   TDԔ?"`     Z$W Ԕ?#"   `  F(n    Zs  Ԕ?#"   R  Yh(n B   ZDjJ?"`    Z\V Ԕ?#"  > F(n    Zx  Ԕ?#"  P0 7 YH(n    NI  Ԕ?#"   g  e/The household can instead buy a 250k home and borrow 200k, this is a standard mortgage deal and borrowing constraints should not operate. Graphically this is an investment in housing with a 5x leverage factor. By buying, the household is taking the symmetric position to the negative liability of rents0 n20   Z@ Ԕ?#"   P@  F(n    Zxz  Ԕ?#"   P  Yp(n     ZHO  Ԕ?#"     nRm.(n H   0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +L L0 KC(  x  c $x 8   B  ZDԔ?"@B  ZDԔ?"`  ZTf  Ԕ?#"  7~ \E(R)(n   Zk  Ԕ?#"  W R(n    ZHi  Ԕ?#"  w ^  nRf.(n   s p0e0e    BpCDE(F @  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B   TDԔ?"`     Z Ԕ?#"   `  F(n    Z  Ԕ?#"   R  Yh(n B   ZDjJ?"`    Z Ԕ?#"  > F(n   Z؍  Ԕ?#"  P0 7 YH(n |  NT  Ԕ?#"     Note that only a segment around H is feasible and not the whole line. This is determined by the minimum house size and the maximum mortgage that a bank would give to this household n2  Z Ԕ?#"   P@  F(n   Z  Ԕ?#"   P  Yp(n    Z  Ԕ?#"     nRm.(n B   `DԔ?"p 00H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0  J(  x  c $ 8   B  ZDԔ?"i   Z  Ԕ?#"  ~ \E(R)(n   Z  Ԕ?#"   p =  R(n    ZL  Ԕ?#"  @'  nRf.(n   Z` Ԕ?#"  Y` F(n   Z  Ԕ?#"  R Yh(n    N  Ԕ?#"     Where do they end up? It basically depends on the size of the house that they bought Wherever they are they will start sliding down gradually, as their discounted expected rents rise (also total wealth will change leverage and rescale things) n2 _%. B   ZDԔ?"P p P B  @ TD8c?"pB   TD8c?"p@   Z Ԕ?#"  2nb F(n   Z  Ԕ?#"   l YH(n   N  Ԕ?"   cEffective position in h(n2  B  ZDV?" 0 P   Z  Ԕ?" \ wStill underhoused(n&    B  ZDV?"p   Z  Ԕ?" 8t  g Rougly hedged(n  B  ZDV?" `   Z@  Ԕ?"X p X overhoused (n   H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +' L0 &@<(  <x < c $, 8   B < ZDԔ?"i  < ZP.  Ԕ?#"   \E(R)(n  < Z3  Ԕ?#"   p =  R(n   < Z  Ԕ?#"  @'  nRf.(n  < Zx Ԕ?#"  Y` F(n  < Z F(n   Zr  Ԕ?#"  P0 7 YH(n   ZtK Ԕ?#"   P@  F(n    Zx  Ԕ?#"     nRm.(n ,  N\  Ԕ?#"     dLets concentrate on household that has just bought a house at full leverage and starts saving moneye n2e  Z4  Ԕ?#"   P  Yp(n B  ZDjJ?"` B  ZDԔ?" H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0 0(  x  c $R 8   B  ZDԔ?"@B  ZDԔ?"`  ZM  Ԕ?#"  7~ \E(R)(n   Z  Ԕ?#"  W R(n    ZHT  Ԕ?#"  w ^  nRf.(n   s p0e0e    BpCDE(F @  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B   TDԔ?"`     ZXe Ԕ?#"   `  F(n    Z@i  Ԕ?#"   R  Yh(n    ZXk Ԕ?#"  > F(n    Z8  Ԕ?#"  P0 7 YH(n B @ ZD)?"   Z. Ԕ?#"   P@  F(n    Z   Ԕ?#"     nRm.(n G  N  Ԕ?#"  p  As time passes the household starts saving money they can pay back part of their mortgage and reduce their exposure to housing. n2  Z  Ԕ?#"   P  Yp(n B  ZDjJ?"` H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +@ oL0 ?7(  x  c $ 8   B  ZDԔ?"@B  ZDԔ?"`  Z {  Ԕ?#"  7~ \E(R)(n   Z,}  Ԕ?#"  W R(n    Z}  Ԕ?#"  w ^  nRf.(n   s p0e0e    BpCDE(F @  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B   TDԔ?"`     ZT Ԕ?#"   `  F(n    Z  Ԕ?#"   R  Yh(n    Z< Ԕ?#"  > F(n   Z  Ԕ?#"  P0 7 YH(n B @ ZD)?" 0   Zh  Ԕ?#"     nRm.(n   Z  Ԕ?#"   P  Yp(n   Z$ Ԕ?#"   P@  F(n   N|  Ԕ?#"  p  :However, for high levels of leverage, it may be more efficient to keep as much as possible borrowed and invest in the stock market. (depends on where the market lies with respect to h) But it crucially depends on which side of the  mirror we are!!!, n2)B  ZDjJ?"`   S T0e0e    B0 CDEF A@  jJ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E||0 Tx h4P@  S"@ H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0 PU(  x  c $tV 8   B  ZDԔ?"@B  ZDԔ?"`  Z|T  Ԕ?#"  7~ \E(R)(n   Z@  Ԕ?#"  W R(n    Z  Ԕ?#"  w ^  nRf.(n   s p0e0e    BpCDE(F @  Ԕ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E|| p ppP8 @   c"$`  ` B   TDԔ?"`     Z Ԕ?#"   `  F(n    ZL  Ԕ?#"   R  Yh(n    ZL Ԕ?#"  > F(n    Z T  Ԕ?#"  P0 7 YH(n B @ ZD)?" 0   Z  Ԕ?#"     nRm.(n   ZP  Ԕ?#"   P  Yp(n   ZLe Ԕ?#"   P@  F(n L  Nlh  Ԕ?#"  pi  But it crucially depends on which side of the  mirror we are!!! On the asset side, stocks give diversification advantages with a negative correlation, on the liability side with a positive one! n2B  ZDjJ?"`   c Z0e0e    B0 CDEF @  jJ 8c8c     ?1 d0u0@Ty2 NP'p<'pA)BCD|E||0 Tx h4P@  S"@ H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +  L0   q (  x  c $ؠ 8   B  ZDԔ?"i   Zt6  Ԕ?#"    \E(R)(n   Z;  Ԕ?#"   p =  R(n    Z @  Ԕ?#"  @'  nRf.(n   Z Ԕ?#"  Y` F(n   Z  Ԕ?#"  R Yh(n    N  Ԕ?#"   y  Still all of these considerations seem to be of a second order when compared with the decision on how big the house should be, and how much leverage to get Just get your housing decision right!! n2B   ZDԔ?"P p P B  @ TD8c?"pB   TD8c?"p@   Z Ԕ?#"  2nb F(n   Z  Ԕ?#"   ` Yh(n   N  Ԕ?"   cEffective position in h(n2  H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + vL0 T0(  Tx T c $H 8   x T c $ 8P   H T 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0 l0(  lx l c $ 8   x l c $ 8P`p   H l 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + iL0 00(  x  c $4 8   x  c $ 8P   H  0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0 40(  4x 4 c $tx 8   x 4 c $@ 8P   H 4 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0 0D0(  Dx D c $ 8   x D c $\ 8P   H D 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B + L0 PL0(  Lx L c $X- 8   x L c $,. 8P   H L 0޽h ? fff333___PPT10i.Ѻ?+D=' = @B +0 PX,(  X^ X S T     X c $V T6 X    " H X 0ηo~ ? ̙3340 h8(  hd h c $T    h s * T6 X   " H h 0ηo~ ? ̙33b0  8(  d  c $T     s *4 T6 X   " H  0ηo~ ? ̙33c0 @8(  d  c $T     s *$x T6 X   " H  0ηo~ ? ̙33d0 `8(  d  c $T     s *H T6 X   " H  0ηo~ ? ̙33f0 8(  d  c $T     s * T6 X   " H  0ηo~ ? ̙33g0 8(  d  c $T     s *X T6 X   " H  0ηo~ ? ̙33h0 p8(  d  c $T     s * T6 X   " H  0ηo~ ? ̙33i0  8(   d   c $T      s * T6 X   " H   0ηo~ ? ̙33k0 88(  8d 8 c $T    8 s * T6 X   " H 8 0ηo~ ? ̙33l0 @8(  @d @ c $T    @ s *@ T6 X   " H @ 0ηo~ ? ̙33n0 X8(  Xd X c $T    X s *̽ T6 X   " H X 0ηo~ ? ̙33x0 8(  d  c $T     s *X T6 X   " H  0ηo~ ? ̙33}0 8(  d  c $T     s *0 T6 X   " H  0ηo~ ? ̙33~0 8(  d  c $T     s *x T6 X   " H  0ηo~ ? ̙330 0 8(   d   c $T      s * T6 X   " H   0ηo~ ? ̙330 8(  d  c $T     s * T6 X   " H  0ηo~ ? ̙330   8(   d   c $T      s * T6 X   " H   0ηo~ ? ̙330 08(  0d 0 c $T    0 s * T6 X   " H 0 0ηo~ ? ̙330 88(  8d 8 c $T    8 s *d T6 X   " H 8 0ηo~ ? ̙330 P@8(  @d @ c $T    @ s *@ T6 X   " H @ 0ηo~ ? ̙330 @H8(  Hd H c $T    H s *̥ T6 X   " H H 0ηo~ ? ̙330 `P8(  Pd P c $T    P s *X T6 X   " H P 0ηo~ ? ̙330 X8(  Xd X c $T    X s *T T6 X   " H X 0ηo~ ? ̙330 `8(  `d ` c $T    ` s * T6 X   " H ` 0ηo~ ? ̙330 h8(  hd h c $T    h s *l T6 X   " H h 0ηo~ ? ̙330 p8(  pd p c $T    p s * T6 X   " H p 0ηo~ ? ̙330 x8(  xd x c $T    x s * T6 X   " H x 0ηo~ ? ̙330  8(  d  c $T     s *0 T6 X   " H  0ηo~ ? ̙330 @8(  d  c $T     s *r T6 X   " H  0ηo~ ? ̙330 `8(  d  c $T     s *h^ T6 X   " H  0ηo~ ? ̙33rH@@ K^-X8mQCs| `W`pnGϤ7-|'`~Ff7}_ @Ů }" |c, 9f/pbwgw7W9hGx7'!ʬksw&e'dKxwR Oh+'0 hp  Slide 1VCdCdinfdvrx188Microsoft Office PowerPoint@Nr @@eѺ@`Hi\Gg  D:  f--$--'--%[--'@"Arial-. :2 u"Efficient portfolios when housing ! '."Systemi-@"Arial-. 92 z!needs change over the life cycle.  .-@"Arial-. 2 >Lorianan .-@"Arial-. 2 >Pelizzon.-@"Arial-. 2 j Guglielmo.-@"Arial-. 2 jWeberz" .-@"Arial-. 2 A discussion by:   .-@"Arial-. 2 $ Vicente Cu   .-@"Arial-.  2 $Q^.-@"Arial-.  2 $gat .-@"Arial-. "2 OUniv. Pompeu Fabra .-՜.+,0     Presentacin en pantallasupf$$: $Arial Book AntiquaTimes New Roman WingdingsRefinedfEfficient portfolios when housing needs change over the life cycle. Loriana Pelizzon Guglielmo Weber Approach Approach Approach ApproachEmpirical ResultsDiscounted Future Rent NeedsDiscounted Future Rent NeedsDiscounted Future Rent Needs6Home ownership leads to additional borrowing capacity An Example An Example An Example An Example An Example An Example An Example An Example An Example An ExampleThe asset sideThe asset sideThe asset sideThe asset side First and second order effects )Indivisibility Plus Access to Borrowing /Housing wealth is illiquid in a particular way/Housing wealth is illiquid in a particular waySome other comments Summing up Summing up: Issues side Fuentes usadasPlantilla de diseoTtulos de diapositiva_ infdvrxinfdvrx  !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}~      !"$%&'()*/Root EntrydO)Pictures97Current User#SummaryInformation(PowerPoint Document(DocumentSummaryInformation8