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What do do with the cash for <12 months.

Discussion in 'Investing Strategies' started by Simon, 14th May, 2007.

  1. Simon

    Simon Well-Known Member

    Joined:
    17th Sep, 2005
    Posts:
    520
    Location:
    Newcastle
    So we have accepted an offer on the house.

    We have already bought the land we will be building on and have a loan of $260K.

    After selling the house and paying out the loan we should have about $385K. We will probably need all this to build over the next 12 months.

    Now putting $260K into the offset account is probably the best place for that cash but what about the extra $125K?

    Should I just take the safe option and put it into INGDirect? Or can someone suggest something else? I can probably get three quarters from the Navra Fund?

    If/when the Rinker sale occurs my margin loan will be down to about 40%. I am considering upping this to invest more in Navra as well. After building my PPOR my next goal is for a cool $M in Navra.

    But I guess my main question is: Is 9-12months really too short a timeframe for Navra?? - I know the PDS says so but it has to :eek:

    Ideas?

    Thanks

    Simon
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Simon

    Sounds to me like you've figured out that you "definitely" need a certain percentage, but the balance is money you'd like to have liquid access to but are prepared to accept some shorter term volatility with (and thus the chance for higher than 6.x% interest on...)

    On one view you might say that putting the money into an actively traded fund like NI which is often in cash to quite a high % (relative to other managers) and which invests in blue chips...would be a rational risk to take - accepting of course the market could tank and take the value of your $125k with it for some time...and perhaps a longer timeframe than you'd like. Of course if you need some of the cash you could always do a partial withdrawal at that time...accepting of course that you'd have forgone any recovery in value and upside...

    Theoretically of course you COULD lose it all...but then theoretically a bus could fall on your head...

    Talk to your financial adviser of course. ;)

    Let us know how you go.

    Cheers
    N.