Good discussion. A few points to consider are that owning your own home vs. owning a rental property are very different. Owning your own home has a poor rate of return (often negative), so isn't really inesting. Buying rental property is investing if done well, and returns can easily be in the mid-teens to over 20% CAGR. Case-Shiller assumes you live in your house, which is a bad investment. I own seven rental properties, and they have all generated quite a bit more return than putting the down payment into the S&P 500 at the same time would have. In terms of diversification, real estate allows you to own something that is outside of the stock market, so that is significant diversification. Just owning different types of stocks doesn't usually protect you from a market crash, but owning assets outside the stock market can.