I predict a massive financial case next 5 years
Discussion
What would you do if you were about to spend about 90% of your entire pot on a deposit on a house? I am torn between dissolving all and holding cash, or alternatively keeping any amount over and above my emergency funds invested.
Willing to be the guy who bought his first house just before the great global financial crash of the 20s, less keen on losing a big chunk of my remaining money on stocks and shares. Guess there's my answer.
Willing to be the guy who bought his first house just before the great global financial crash of the 20s, less keen on losing a big chunk of my remaining money on stocks and shares. Guess there's my answer.
Hustle_ said:
What would you do if you were about to spend about 90% of your entire pot on a deposit on a house? I am torn between dissolving all and holding cash, or alternatively keeping any amount over and above my emergency funds invested.
Willing to be the guy who bought his first house just before the great global financial crash of the 20s, less keen on losing a big chunk of my remaining money on stocks and shares. Guess there's my answer.
Just buy the house. Once you own it the value drop is not realised if you do not sell it...just wait it out, it's a home.Willing to be the guy who bought his first house just before the great global financial crash of the 20s, less keen on losing a big chunk of my remaining money on stocks and shares. Guess there's my answer.
Definitely buying the house, all going well. No second thoughts there.
I'm just figuring out what to do with my investments.
When I spend all of my cash on the house I will suddenly have gone from Stocks & Shares making up 10% of my available pot to about 50%.
Suddenly I am less comfortable with the amount of stocks and shares I will have compared to cash. I think I've answered my own question- sell some of 'em. Hard to do though because for the first time in forever they have some upward momentum.
It would be good to know for sure whether there will be a big financial case, and exactly when it will be
I'm just figuring out what to do with my investments.
When I spend all of my cash on the house I will suddenly have gone from Stocks & Shares making up 10% of my available pot to about 50%.
Suddenly I am less comfortable with the amount of stocks and shares I will have compared to cash. I think I've answered my own question- sell some of 'em. Hard to do though because for the first time in forever they have some upward momentum.
It would be good to know for sure whether there will be a big financial case, and exactly when it will be
Hustle_ said:
Definitely buying the house, all going well. No second thoughts there.
I'm just figuring out what to do with my investments.
When I spend all of my cash on the house I will suddenly have gone from Stocks & Shares making up 10% of my available pot to about 50%.
Suddenly I am less comfortable with the amount of stocks and shares I will have compared to cash. I think I've answered my own question- sell some of 'em. Hard to do though because for the first time in forever they have some upward momentum.
It would be good to know for sure whether there will be a big financial case, and exactly when it will be
Do you need the money currently in your s&s or is it purely that you want to have 50% of your portfolio in cash for some reason?I'm just figuring out what to do with my investments.
When I spend all of my cash on the house I will suddenly have gone from Stocks & Shares making up 10% of my available pot to about 50%.
Suddenly I am less comfortable with the amount of stocks and shares I will have compared to cash. I think I've answered my own question- sell some of 'em. Hard to do though because for the first time in forever they have some upward momentum.
It would be good to know for sure whether there will be a big financial case, and exactly when it will be
Hustle_ said:
50% basically equates to an 'emergency fund'. What I'm trying to figure out is whether it's going to have been wise to have the other 50% invested in S & S, or whether I should sell some of them to de-risk. Anybody with a crystal ball?
Sensible to have a healthy emergency fund in these uncertain times, past that when do you need the money? If it's 20 years wack it all in the market.Hustle_ said:
Definitely buying the house, all going well. No second thoughts there.
I'm just figuring out what to do with my investments.
When I spend all of my cash on the house I will suddenly have gone from Stocks & Shares making up 10% of my available pot to about 50%.
Suddenly I am less comfortable with the amount of stocks and shares I will have compared to cash. I think I've answered my own question- sell some of 'em. Hard to do though because for the first time in forever they have some upward momentum.
It would be good to know for sure whether there will be a big financial case, and exactly when it will be
50% shares / 50% cash isn’t the worse place in which to be. I'm just figuring out what to do with my investments.
When I spend all of my cash on the house I will suddenly have gone from Stocks & Shares making up 10% of my available pot to about 50%.
Suddenly I am less comfortable with the amount of stocks and shares I will have compared to cash. I think I've answered my own question- sell some of 'em. Hard to do though because for the first time in forever they have some upward momentum.
It would be good to know for sure whether there will be a big financial case, and exactly when it will be
If the market crashes then use some of the cash to buy shares.
Conversely you won’t lose a penny if shares go down assuming you don’t actually sell them.
I’m assuming you are relatively young so does Pension planning come into your thoughts ?
Other than the obvious statement about not perhaps being able to do everything with the advent of a mortgage , investments and how structured should also be about what makes you feel comfortable.
I misread your post at first, but I don't think your situation needs to deviate from the standard advice too much. Equity/cash splits are very personal based on risk, for example, I never intend to hold more cash than a years expenses, currently I have that, and cash makes up about 25% of my funds, in time that cash percentage will continue to drop as my equities investments grow.
If I were you, I'd seek to perhaps rebalance to where you want to be once you've spent your cash on the house. Stocks are indeed almost at all time high as of now, not a bad time to do it if you do not want to have 50% exposed to the markets.
What I would say though, 50% is not particularly adventurous as an exposure to the markets, depending on your age of course. I do not see 'cash' as anything other than a sure fire way to lose value, the ONLY reason I hold any at all is that if we lose our jobs I don't want to be forced to liquidate investments in a crap market to pay my bills.
If I were you, I'd seek to perhaps rebalance to where you want to be once you've spent your cash on the house. Stocks are indeed almost at all time high as of now, not a bad time to do it if you do not want to have 50% exposed to the markets.
What I would say though, 50% is not particularly adventurous as an exposure to the markets, depending on your age of course. I do not see 'cash' as anything other than a sure fire way to lose value, the ONLY reason I hold any at all is that if we lose our jobs I don't want to be forced to liquidate investments in a crap market to pay my bills.
Tim Cognito said:
Hustle_ said:
50% basically equates to an 'emergency fund'. What I'm trying to figure out is whether it's going to have been wise to have the other 50% invested in S & S, or whether I should sell some of them to de-risk. Anybody with a crystal ball?
Sensible to have a healthy emergency fund in these uncertain times, past that when do you need the money? If it's 20 years wack it all in the market.alscar said:
50% shares / 50% cash isn’t the worse place in which to be.
If the market crashes then use some of the cash to buy shares.
Conversely you won’t lose a penny if shares go down assuming you don’t actually sell them.
I’m assuming you are relatively young so does Pension planning come into your thoughts ?
Other than the obvious statement about not perhaps being able to do everything with the advent of a mortgage , investments and how structured should also be about what makes you feel comfortable.
Coming around to the idea that 50% or more in shares might not be completely bonkers. I got here because I have been building and holding for quite a while and now there's enough in there that it seems kind of well-geared rather than a waste of time If the market crashes then use some of the cash to buy shares.
Conversely you won’t lose a penny if shares go down assuming you don’t actually sell them.
I’m assuming you are relatively young so does Pension planning come into your thoughts ?
Other than the obvious statement about not perhaps being able to do everything with the advent of a mortgage , investments and how structured should also be about what makes you feel comfortable.
I'm probably not as young as you think- 35 soon. I've got more than a year's Gross income in my pension at the moment. Currently 18% in total going in there but I may reduce it to 12.5% for a couple of years to help me reach my 60% LTV target.
I have absorbed a lot on the overpay vs. invest debate and I think I prefer the flexibility of saving / investing and maybe making the odd lump sum overpayment at the end of the year or renewal time.
It's easy to be seduced by all of the copy out there on one side or the other. Read a bit about the US equities 'bubble' and US banks commercial property exposure last night.
I guess, as you say, keep buying and ride it out in the event that it goes pop. I am into the house at 30% LTV so have some margin in the event that I go backwards. So long as I've got my income and my emergency fund...
You just need to be clear on what pots of money are for which things and what timeframes are attached to them.
I think it’s quite a simple one. 2 years isn’t equities investment timeframes in the eyes of most. So that pot can be cash, long term investments (you are young at 35) should be more market facing if you hope to beat inflation. I’d also say depending on your salary 1 years gross in a pension is on the cusp at our age. Unless you’re on a 6 figure salary then it’s probably OK.
I think it’s quite a simple one. 2 years isn’t equities investment timeframes in the eyes of most. So that pot can be cash, long term investments (you are young at 35) should be more market facing if you hope to beat inflation. I’d also say depending on your salary 1 years gross in a pension is on the cusp at our age. Unless you’re on a 6 figure salary then it’s probably OK.
okgo said:
You just need to be clear on what pots of money are for which things and what timeframes are attached to them.
I think it’s quite a simple one. 2 years isn’t equities investment timeframes in the eyes of most. So that pot can be cash, long term investments (you are young at 35) should be more market facing if you hope to beat inflation. I’d also say depending on your salary 1 years gross in a pension is on the cusp at our age. Unless you’re on a 6 figure salary then it’s probably OK.
Yup tend to agree especially on the pot separation / pension comments. I think it’s quite a simple one. 2 years isn’t equities investment timeframes in the eyes of most. So that pot can be cash, long term investments (you are young at 35) should be more market facing if you hope to beat inflation. I’d also say depending on your salary 1 years gross in a pension is on the cusp at our age. Unless you’re on a 6 figure salary then it’s probably OK.
The whole cash v inflation debacle still cannot replace comfort factor whether real or physiological.
Keeping none of my wealth in cash like you said won’t help me when I buy cars and my wife her horses though !
Couple of helpful posts okgo- thanks. I get that my mortgage overpayment fund will need to be cash.
You are right that I seem confused about what the objective is for my stocks & shares. I have learned the hard way about cash savings and inflation. I suppose the obvious thing would be to build them up steadily until they eventually eclipse my mortgage.
You are right that I seem confused about what the objective is for my stocks & shares. I have learned the hard way about cash savings and inflation. I suppose the obvious thing would be to build them up steadily until they eventually eclipse my mortgage.
Some are predicting SPY500 to have a huge melt up to 7000, followed by a hard collapse.
I don't truly believe it will happen but if it did, our pensions would soar. At that point, I would be transferring the pension investments towards cash equivalent just to lock in that gain.
I don't have much cash in the bank at all, never have, but got a chunk in Tesco and Sainsburys shares. Boring as hell, but we all gotta eat and they're solid companies. Asda riddled with VC debt on the other hand.
I'm praying that we don't get a big melt up followed by a bust. I personally think we'll just painfully make our way through this sticky inflation and it might take the rest of this decade. BRICS to me isn't the beginning of a new world order or anything like that. I see it as a hedge play for the countries involved so that the value of goods is the value of goods, nothing more nothing less. They still need and want the high consuming Western nations, which is why I think a world war is also out of the question.
Political posturing will be high no doubt but if Russia is any predictor, a large war will be disastrous for their day to day citizens. China just wants a seat at the big boy table and to be fair to China, it warrants it's place there. I think we'll see lots of flex from big nations. EU shutting the door to China on China built cars for example. Come here and build, yeah, thats fine but you're not importing from China.
I see lots of protectionism on the horizon with diplomatic strained relationships but we'll iron out the wrinkles rather than go full scale war. At least thats what I'm hoping for.
I don't truly believe it will happen but if it did, our pensions would soar. At that point, I would be transferring the pension investments towards cash equivalent just to lock in that gain.
I don't have much cash in the bank at all, never have, but got a chunk in Tesco and Sainsburys shares. Boring as hell, but we all gotta eat and they're solid companies. Asda riddled with VC debt on the other hand.
I'm praying that we don't get a big melt up followed by a bust. I personally think we'll just painfully make our way through this sticky inflation and it might take the rest of this decade. BRICS to me isn't the beginning of a new world order or anything like that. I see it as a hedge play for the countries involved so that the value of goods is the value of goods, nothing more nothing less. They still need and want the high consuming Western nations, which is why I think a world war is also out of the question.
Political posturing will be high no doubt but if Russia is any predictor, a large war will be disastrous for their day to day citizens. China just wants a seat at the big boy table and to be fair to China, it warrants it's place there. I think we'll see lots of flex from big nations. EU shutting the door to China on China built cars for example. Come here and build, yeah, thats fine but you're not importing from China.
I see lots of protectionism on the horizon with diplomatic strained relationships but we'll iron out the wrinkles rather than go full scale war. At least thats what I'm hoping for.
Caddyshack said:
Hustle_ said:
What would you do if you were about to spend about 90% of your entire pot on a deposit on a house?
Just buy the house. Once you own it the value drop is not realised if you do not sell it...just wait it out, it's a home.Markets tend to fall more quickly than they rise. That mismatch drives the sell decision when you have a known commitment upcoming. You don't want 20% of your house deposit to suddenly go missing.
soupdragon1 said:
Some are predicting SPY500 to have a huge melt up to 7000, followed by a hard collapse...
I'm praying that we don't get a big melt up followed by a bust.
From the context I deduce that a 'big melt' is what we normally call a boom, is that right? If so it's the first time I've heard of something melting up as opposed to melting down I'm praying that we don't get a big melt up followed by a bust.
Would 'hard collapse = soaring pension fund' be an exchange rate issue?
Panamax said:
Caddyshack said:
Hustle_ said:
What would you do if you were about to spend about 90% of your entire pot on a deposit on a house?
Just buy the house. Once you own it the value drop is not realised if you do not sell it...just wait it out, it's a home.Markets tend to fall more quickly than they rise. That mismatch drives the sell decision when you have a known commitment upcoming. You don't want 20% of your house deposit to suddenly go missing.
Simpo Two said:
soupdragon1 said:
Some are predicting SPY500 to have a huge melt up to 7000, followed by a hard collapse...
I'm praying that we don't get a big melt up followed by a bust.
From the context I deduce that a 'big melt' is what we normally call a boom, is that right? If so it's the first time I've heard of something melting up as opposed to melting down I'm praying that we don't get a big melt up followed by a bust.
Would 'hard collapse = soaring pension fund' be an exchange rate issue?
Yes, melt up as in boom.
I didn't mean soaring pension fund during a collapse, but during the boom. If it's on its way to 7000, I'll move out at 6500, but I'm hoping it doesn't boom like that. Not a sign of good health.
Who knows what FX will do if that event occurs. I would suspect a very weak dollar though, should it materialise.
Gassing Station | Finance | Top of Page | What's New | My Stuff