Where to put 1.2 million savings now?

Try a little fx arbitrage - Buying NZD and waiting for it to outpace the AUD sad they come out of lockdown before we do.

 

I agree - but given the very high bonds and cash holdings of Vanguard Conservative funds I wonder what the advantage of switching to cash would be? Long term though cash and gold won't work, particularly at todays low rates, and how do you choose when its "safe" to buy shares?

 

By the time you're comfortable with the positive signs, so is everyone else and you've missed the bottom.

 

Hi @Brumbie , how do we find more abt investment grade bonds?

I mean other than the meaning-buying selking etc

 

No
You dont buy in a falling market unless you are prepared to lose capital

 

Do you mean educating yourself or the actual bonds on offer?
A good start is to go to "FIIG Securities" website.
Corporate Bonds and Fixed Income | FIIG Securities
News and Research and Education sections for the learning. Bond rates for actual bonds you can buy. You can filter etc. Great website actually. Lots of info on there. After that call up and get yourself a broker and they give you options, opportunities and research as they come about or to suit your needs. Note the best deals are at the wholesale level but they have smaller parcel options.

 

In a slower moving market like property I'd agree.

In the sharemarket you can miss the boat in a matter of weeks.

If you're worried about losing capital did you have a strategy to take money off the table at record highs or have you only started worrying about it after a 30% drop?

 

Much appreciated @Brumbie , will review the provided info.

Bonds trading need different broker than the likes of commsec/nabtrade?

 

I am not worried at all, I just dont see point buying in on the way down. The economy not going to recover over night, same as property would not be buying now

There is absolutely no rush. My strategy is to sit back and wait. I am not a fan of cost averaging in a bear market. Just my opinion

 

Yes. With bonds you actually talk to an advisor. It is a complicated beast as you need to assess credit worthiness of a company and there are so many types of bonds and at different levels of security. They do in depth analysis papers on companies and advise you of opportunities that come up. It is very different to Commsec which is desktop based.

 

The absolute bottom is only ever defined in hindsight - often months later.
Those who buy on the day the market bottomed are lucky, not clever.
Waiting until the worst is definitely over is a sound strategy, one which we successfully followed after the GFC.

 

This and other posts would seem to indicate being influenced with the issues of market timing.

Fair enough. People are who they are and take the path which they believe, wrongly or not, suits them.

Sometimes indecision can be one's worst enemy.

 

Remember how, back earlier this year, so many were saying they were just waiting for a downturn to buy into the share market?

Well, the downturn is here.

It is not so simple, is it, when you are actually living through a downturn event?

 

Hi all.I decided to cash out.

 

Now, don't forget to buy back in

 

That's where it doesn't make sense. People wait for a downturn and when they get one they want to wait for a recovery.
I'll take blood on the streets any day.

 

Theoretically, your FA put you in a conservative fund because you have a low risk tolerance.
Has your risk tolerance changed? If not, stay with the plan: selling after losses (changing the plan) is the most common way for investors to lose money. Remember, the market could go up from here, so moving into cash would ensure a loss of money in the context of inflation.

No-one knows what's happening next, no matter how confident or convincing they sound.

 

When you say investment grade bonds, what do you mean? Are you buying Treasury bonds? BBB and above rated corporate bonds? Can you please provide some further detail?

Please correct me if I am wrong, but 0.65% per month return would equate to 7.8% return per annum? For "investment grade bonds"? Seems nearly too good to be true...

 

Not Govenment bonds. Only corporate BBB and above. There has been a dislocation in the market (which is correcting by the way) . You buy bonds at under par. Giving you 4-5% coupon and a few percent CG. Examples are AMP at 7.502%, FMG at 8.388%,BHP at 8.087%, Merredin Energy at 7.68%, Newcastle coal Infr at 7.392%,Syd Air at 6.71%, even the banks for low 5's. There are very solid "unrated" bonds out there as well for the same money.

 

You can buy that retail? I thought it’s just private placement?