Yes the benefit is psychological but I think there's more to it as well.

Firstly within investing, I am assuming that a person has safety net amount of money before properly investing. This is something that I have heard some people don't exactly do.

As such, what happens is that, they might lose a job and have to pay rent and might have to sell the stocks or any index fund/investments that they had within the market (which depends on if the market is doing good or bad too) and overall snatches opportunity for money to actually grow for years.

I recommend having a safety net but I must admit that there is still some psychological stress overall due to multitude of factors, as such, if possible, buying a house feels like it might be overall decent choice and the differences might not be so much.

that being said, I do think that it depends upon the land prices and many other things overall too.

Also, this is tangential but I used to be a boglehead, still am but with recent cases of Nasdaq[0] & I think S&P bending towards SpaceX and AI IPO's by literally bending rules, it does feel like the investment markets might be more shaky given other factors

(Not a financial advice at all) but I recommend looking towards dimensional index funds which do just a very bit more than index funds if the addition of floaty investments like SpaceX and other IPO's make you fear similar to me.

But the thing is that the downstream effects of it will still be visible, for example, just imagining if SpaceX gets added to IPO and then quickly added to Nasdaq/S&P and then it falls substantially for any reason. The thing is that the market itself would be spooked and other funds would be impacted too.

I have belied in the market efficiency hypothesis but a lot of it feels like private equity trying to raise evaluations to then push it to index funds (by in this case, asking nasdaq to bend the rules to force passive investors to buy and hold the bags basically impacting retirement accounts too and perhaps even govt bailouts but basically it becomes privatization of gains and socialization of losses and becoming too big to fail.

I must say that it feels a bit of blatant corruption in some instances like the one for SpaceX and this removes my confidence within markets.

I do recommend overall diversification for world stocks and also housing if affordable.

I wish to still invest in markets but with a bit more caution rather than blind optimism. Also no, active investing doesn't quite work either reading john bogle books and other resources and passive investing is still superior to active investing overall but just with more caution. That's all.

[0]: https://www.thestreet.com/latest-news/new-nasdaq-rules-open-...