How to hold cash for a few years

We suddenly have more cash than I know what to do with. I was going to put it into Super, but now thinking that buying a block of regional land might get better growth in the next 3-5 years. I am concerned about Super dropping in value and the potential for banks/super funds/gov to take it before we get to use it. What do you think?

 

Depends on what your super invests in I guess and when you need the cash

 

Government bonds indexed to inflation?

 

Do you have any loans where the offsets aren’t fully chocked?

If not, I would suggest Super as one can control the risk.

For me, regional land is risky, no income unknown/unpredictable growth, no tax advantages and one can’t control the risk.

 

That's what a rellie said a few months back and I can't get that idea out of my head.

 

I would just buy CBA shares and sit on them. Easy peasy. Note this is not financial advice.

 

Transactions costs would wipe out any growth in regional land if invested for 3-5 years plus regional land could get extremely hard to sell in a soft market.

Easiest thing to do would be to put your money into an index fund like VDHG. It’s an index fund with diversified investments so any downside is fairly low.

Another option would be to buy equal amounts of shares in Big 4 + Macquarie bank and keep reinvesting dividends.

 

I’m sorry but how can anyone advocate holding shares for 3-5 years as a safe option????

 

I am thinking of Gladstone, for example.

 

What would you suggest:- cash?? property???

 

ETFs are very different to just ‘shares’, funds like VDHG have very low downside due to built in diversification. Most people who retire early leave every single penny they own in the ETFs.

 

I have rarely run into anyone that have invested long-term into the banks for above 25 years that complain once you add compounding and never sell if they go down 75% as you just buy more ..
..
Every 3-5 years in equities markets the dominoes fall and some property and financial entertainment gurus are saying as people become un-linked from social media a few companies linked may be in for a hard time..

 

When you look at the below one percent that's paid for money sitting in the bank ,you might as well with something like CBA just buy the shares in the company --Even with the dips in the market as they are never very large over a 25 year span..

Swing trading - Wikipedia

 

Total returns of 9% pa for the last 5 years is bloody awful (… and one has to add back in dividend imputation to even increase the after tax return) .

Last 2 years is even worse at 10.4% (without adding back dividend imputation) .

I bought CBA 11 years ago - total returns of 10.5% pa (without adding back dividend imputation). What a shocker!!!

I could never convince my MIL to take some of her money out of the bank and buy shares in that bank. Too risky she said .

 

Buying into market highs is a capital risk as a share market correction hasnt been evident for some time. During the GFC markets fell 30% approx. The MIL has a reasonable concern if she seeks capital preservation.

A insurance bond could be a option. Its also tax paid. No CGT, no income tax. Doesnt pay any income. BUT a long term requirement to hold it.

 

We had a correction last month and a bigger correction in February/March 2020.

Have you forgotten about these?

 

Paul is discussing "correction" risk.