About 8% of my portfolio are in banks stocks but I think that even with these stocks I am better than a banker because:
I think as dividends-growth investor I behave as a kind of mortgage banker in my investment - I land money (if company "credit history" is good) with expectation of regular payments (aka dividends). I hope to be in better position than the banker, because I'll own "property" (aka stocks) and can sell it when I want. Also the "payments" (in contrast with mortgage interest) should rather increase than decrease with time if my choice of the company is right. Of course within limited period of time (30 years for typical US mortgage) the banker usually uses time value of money better than me or any other dividend growth investor DGi (the banker request to cover interest before principal). But in some rare cases (such as Spring 2009 market dip) it is possible to buy excellent dividend growth companies with initial yield on cost YoC above average mortgage interest rate.
Well some companies do not pay any dividends and some investors like such stocks (I did then I was young & naive). One argument against non-payers:
Let say I'm a home buyer and ABC is the lender. Will ABC give me mortgage if I promise you to spend some $$$ (I suppose to pay as interest in regular fixed rate 30 years mortgage) for house improvements, not to pay anything to the lender each month but promise to pay huge amount at the end of mortgage term?
If you know such ABC lender, please let me know and I'll buy a huge nice house 8-).
Added 11 April 2013:
Often mortgage can be refinance for lower rate (but it cost money) but I don't know factors and cases of YoC negative change except additional investment in the same company at lower yield. On another hand, except 2008-2012(?) house market meltdown probability of foreclosure (historically ~ 1%) is lower than dividend cut probability (historically ~ 3 % - see seekingalpha.com/instablog/725729-sds-se...). Also it seems that acquisition of DG firms (also ~ 3% annually -see seekingalpha.com/instablog/725729-sds-se...) which eliminate long-term growing steam of income for DGi happens probably more often that natural or artificial disasters (such as a hurricane or a fire) which totally destroy houses and result /as far as I understand/ to mortgage banker's losses. I really don't have statistics for such losses and cannot Google it - but reported ~ 3000 deaths/year from fire in USA with 300M people population leads to estimation of 0.1% or less for combined losses from natural or artificial disasters. BTW I'm just curious - do insurance companies (and I invest in some) try to hide meaningful statistics for house destruction by fire, flood, etc. in order to collect more payments?