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A pullback in housing prices would open the door to home ownership for some renters.

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Young adults in Toronto, Vancouver and other communities with hot housing markets are getting desperate. They worry that unless housing prices fall, they'll never get into the market. "I know it's mean to say and I know it would hurt those of our friends who completely over-extended themselves," says a Vancouver resident interviewed by Maclean's. "But honestly, we're praying for a crash."

I've been saying for ages that if you can't afford to buy, renting is a perfectly sound option. Lower expenses as a renter leave you room to invest and build wealth comparable to the homeowner with rising equity. But there's a problem with renting – a shortage of affordable properties.

A pullback in housing prices would open the door to home ownership for some renters. If prices only stagnate or keep rising, we run the risk of leaving both renters and aspiring owners priced out of our biggest cities. Housing have-nots are already resentful. It could get worse.

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What's your investor profile? This calculator helps you find out and then suggests an appropriate mix of stocks and bonds.

Ask Rob
The question: "I'm 31 and about 8.5 per cent of my entire portfolio is in a single bond fund with the remainder in equities. My adviser tells me that I should retain the bonds for the inevitable event of a recession so that I have something available to sell in order to buy more equities, which will be relatively undervalued at that time. Generally speaking, do you agree with this approach?"

The answer: "Having less than 10 per cent of your portfolio in bonds is bold, but at your age it can make sense if you're confident you won't be tempted to sell in a stock market downturn. I gather that your adviser is suggesting you rebalance if stocks tank. Bonds would likely account for a higher percentage of your portfolio in that situation (they'd rise in price while stocks fell). Rebalancing would mean selling some of your bond fund to buy stocks and get them back up to 90 per cent or so of your portfolio. If so, then I agree."

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length.

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