Where to put 1.2 million savings now?

Hi all.

So hubby and I had a plan to invest in stocks about 18 months ago after selling our PPOR to move to South Korea and live as expats for two years. The plan was to slowly build up a portfolio that would pay us a wage so that we could segue way into an early retirement. Initially, the FA told us to stay put as he was not confident about us buying in aggressively, so we put our 1.2 million into a term deposit and collected the gain.

End of last year the FA suggested parking most of our savings in the Vanguard Conservative Index fund where it made a small gain and seemed relatively safe. To-date our hard-won nest egg is now down about 6 per cent. With all the talk of impending doom we're now really worried about what to do now. Do we cut our losses and get the cash back into the bank and wait to buy in after the market tanks? Do we leave it in the fund where it is vulnerable to further losses? The last conversation with the FA did not enlighten us.

Happy to hear the thoughts of other newbies.

 

You dont have a ppor though. Can you retire without a place to live? Would you want to live in an expensive place like syd or melb?

so you know that the market is going to tank? And you will buy at the right time? Why do you think this?

 

get it out, sit on cash as lots more lows to come

be in the box seat

 

Hiya. We have a property in Sydney, and it's currently tenanted. So no problem there, just homeless for now as we had to leave our apartment in ROK.

 

Yep. This is our gut feeling. Worried we will get more burnt and also not be liquid enough to take advantage of any opportunities...

 

What did your FA say in response to this question?

 

In our last conversation he was unsure where was safe at all...not alarmist but just really unsure which is not usual.

 

Make up 6% loss and much more at the end with buying at the bottom

 

If your money isn't safe in vanguard conservative its not safe anywhere. That's a very low exposure to shares, around 30%. Its called conservative for a reason.

Going safer isn't the issue, it's how to go into more risky assets. If it was me I'd be implementing a transition to VGAD over a 5yr period, something like 20% per year. You can add a performane kicker to feel like you're in control - maybe every 10% drop you convert another 10% of the original amount. This tends to not work optimally though. There is plenty of "evidence" that just switching to all shares straight away is best but the stress and tail risk isn't worth it for most people. For me I'm transitioning over a long timeframe just to stop me stressing. It also leaves me cash to invest in real estate etc. if I choose.

One thing I am confident in - gold sucks and cash is a guaranteed way for long term loss of capital. They are not long term options.

Not advice, just thoughts.

 

Hi Butterfly88 - Not sure shares are for you based on your post.

Down 6% capital value and your wanting to move to another asset class?
Worried about impending doom?
Wait to buy in after the market tanks?

It sounds like a period of self education may be the best direction for you. There are fantastic threads in this InvestChat section to start with. Once you have clear understanding of the lay of the land you, perhaps then you can make an informed decision for yourself as to if shares are the asset class for you.

 

You could try the Australian Bond Exchange if you feel equities are a bit too volatile for you.

I have used them myself, as part of having a balanced portfolio in my SMSF.

 

What date was that again?

 

who knows?? But why take a risk in bear market

Take your money just sit back and wait.

There are strategies when to buy in but patience is required. Dont buy in till we positive signs we are a long time off this

 

Agreed. You are buying companies. For the life of me I do not understand how anyone can value most companies at present and looking forward over the next 12 mths. Buying an index is gambling black/red now in my view. Unless you can analyse for value and stock pick, just sit back in iso and drink martini's and wait for a better hand. Maybe DCA over the next year or so?
I am personally totally out since Feb. I am investing in investment grade bonds that have been called or maturing in 4-6 weeks and just rolling it over. Due to market stresses we are making a small CG plus coupon for an average of 0.65% per month return so far. The amount you have is big enough to do this in the wholesale market and not tie up your money.

 

Put about 200k in Maven I think that maybe the minimum, I am , at least have a talk to Matt. This guy doesnt need to push his fund he makes enough without having to spruik. He is only opening up his fund to the public after years of popular pressure/ persuasion. With an amount like that you can get access to the best fund managers. Only invest in Funds where the managers are heavily invested themselves. Introducing Maven Funds Management .

 

Don't forget, you haven't lost anything yet, you only make a loss when you sell while -6%

 

Hi there. Yep now we are in lockdown that is what I am doing, long way to go but doing it now I have the time. One of the reasons I've become active in here again...Cheers.

 

Certainly true, but cash can be a way of riding out volatility in the shorter term.

 

Buy some oil futures?