wealth. This steep drop in value hit hardest those who were close to retirement and were counting on their

stock funds to supplement retirement income.

The bottom line on investing in mutual funds is that the rate of return over time will be high. The risks are also

high, but the risks and returns for an individual mutual fund will be lower than those for an individual stock.

As with stocks, liquidity is also high provided the mutual fund or stock index fund is readily traded.

Housing and Other Tangible Assets

Households can also seek a rate of return by purchasing tangible assets, especially housing. About two-thirds

of U.S. households own their own home. An owner’s equity in a house is the monetary value the owner would

have after selling the house and repaying any outstanding bank loans they used to buy the house. For example,

imagine that you buy a house for $200,000, paying 10% of the price as a down payment and taking out a bank
{"file_size_mb": 26.99, "creator": "PDFMiner", "file_name": "Microeconomics3e.pdf", "batch_upload": true, "upload_timestamp": "2026-02-07T15:24:38.309401", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "title": "Principles of Microeconomics 3e", "moddate": "2022-12-07T14:23:05-06:00", "creationdate": "2022-12-07T14:15:44-06:00", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "total_pages": 597, "producer": "Prince 14.2 (www.princexml.com)", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_type": ".pdf", "uploaded_via": "batch_uploader"}