[H8crilA]

One thing that you have to in your life is to choose your risk exposure to typical assets: cash, bonds (in particular long term bonds), stocks, real estate, and maybe commodities (like gold, or maybe Bitcoin for the courageous). Sharpe ratio is a good way to measure risk/return.

You have 100% at any given point, where does it go? Not buying anything is going 100% cash. That's why you have to do it - you're always in some exposure.

Then you can always lever up securities, effectively going negative on cash. Example: 105% stocks, 195% long term bonds, -200% cash can be achieved by going 35% UPRO, 65% TLT; only for the brave souls among us that do not fear a 300% leverage. This is roughly how the Bridgewater All-Weather Fund operates (AFAIK you can choose your leverage level there).

Many households are quite levered up by getting a mortgage. A mortgage with downpayment of 20% results in 1/0.2 = 500% leveraged exposure to the real estate market (slowly declining over time as the principal is paid, or if the house appreciates in value).

[im3w1l]

Mortgages have the advantage that you can't get margin called at an inopportune moment.

[H8crilA]

But the bank that has your mortgage on their balance sheet can get margin called. Ask Lehman Brothers how does that happen :)

[jacobkranz]

I heard through a realtor / friend that during '08 there were some home equity loans that were called back though. I don't know the exact details of those who had their HEL's called but my friend stressed that mortgages would never be called back (unless capitalism collapses) but HEL's could be even if you're making on-time payments depending on terms.

[tomatocracy]

It's also not uncommon to see maintenance (ie tested every x month, not just on initial borrowing) loan to value covenants in commercial Real Estate lending, including at quite small scale (think small independent hotels and the like).