Gordon Pape: Pay Down Mortgage or Invest in Market?

Q – I would value your opinion on the juggling act of paying down mortgage versus investing in the market at this time, with the intent of selling the principle residence in two to five years.

The upside is a safer investment in the house which, of course, will be a tax-free capital gain at the time of sale, versus the potential for higher returns in the market. But any capital gains are taxed so, like others in my situation, I am scratching my head wondering what to do. – John R.

A – Scratch no more. Pay down the mortgage. Stocks are very expensive right now and investors seem to be ignoring the fact that we are living in the most dangerous economic times since the 1930s, thanks to Donald Trump’s trade wars. Yes, there is still some upside potential in stocks, but there is a lot of downside risk. Paying off the mortgage is much the safer route. – G.P.