My point was that during a drawdown you may never know what’s the best move, or even move, except if you apply strict rules. And have time, indeed.
May it recover? go deeper? What if x y z? It’s only in hindsight that you would analyze “oh well it took time so if it happens again I have plenty to manage my assets/loan/whatsoever”, living the market turmoil is very different than that.
Whether using loans is advantageous or not is a topic on its own. But if a person has decided to get a loan, I would certainly recommend a collateralized loan with a low interest rate over a non-collateralized loan with a high interest rate. The goal in every case would be to minimize the cost of debt.
If one has an extremely well-diversified investment portfolio with many different asset classes, the risk of that portfolio losing value should hypothetically be much lower than the risk of a single property losing value. Theoretically, at least, a Lombard loan could be more secure than a mortgage. But I don’t have any data to back up that theory. Would be an interesting study though.
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