Personal Finance

House Sold Money Sitting in Account

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  • Nov 20th, 2011 10:47 am
Newbie
Jan 16, 2011
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House Sold Money Sitting in Account

House recently sold and have yet to purchase a new home as I feel its a sellers market and that
that prices on inflated.

I don't know when I'll purchase a new home but I know I eventually will within a year. In the meantime
I'll be renting until things change.

Any suggestions with where to hold funds. I don't want to roll the dice on stocks so does that leave
me with GIC's. Don't really know what to do and have quite a lot of money sitting around doing nothing.

What do you think I should look into?? I have time to research but don't know where to begin
and don't want to risk principal. I guess my options are limited... right??
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May 15, 2010
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Have you considered a REIT? They are not as volatile as stocks and will pay much more than any GIC. They are also taxed much more favorably than GICs which makes the difference even greater.
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moejenkins wrote: House recently sold and have yet to purchase a new home as I feel its a sellers market and that
that prices on inflated.

I don't know when I'll purchase a new home but I know I eventually will within a year. In the meantime
I'll be renting until things change.

Any suggestions with where to hold funds. I don't want to roll the dice on stocks so does that leave
me with GIC's. Don't really know what to do and have quite a lot of money sitting around doing nothing.

What do you think I should look into?? I have time to research but don't know where to begin
and don't want to risk principal. I guess my options are limited... right??

Within a year? Have you considered high interest saving accounts?
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May 30, 2005
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Dilton wrote: Have you considered a REIT? They are not as volatile as stocks and will pay much more than any GIC. They are also taxed much more favorably than GICs which makes the difference even greater.

Do you think REITs are good value? They more or less have surpassed 2008 levels... don't know how far they can push ahead.
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Jon Lai wrote: Do you think REITs are good value? They more or less have surpassed 2008 levels... don't know how far they can push ahead.

REIT's are the same as before 2008. They increased in value because investors think they are safe (due to distributions) and their borrowing costs went down significantly. Most of these REIT's are highly leveraged.
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moejenkins wrote: Any suggestions with where to hold funds. I don't want to roll the dice on stocks so does that leave
me with GIC's. Don't really know what to do and have quite a lot of money sitting around doing nothing.

What do you think I should look into?? I have time to research but don't know where to begin
and don't want to risk principal. I guess my options are limited... right??

Why are you so obsessed with 'principal'? "Rolling the dice on stocks"? Stocks are a whole heck of a lot less risky and more diversified than a single house in Mississauga ever was, and offer more diversity than sitting 100% in cash or GICs.

My recommendation, as always, is a balanced portfolio of cost-efficient investments, usually ETFs, but can include, among other things, REITs (which are *highly* risky...despite claims to the contrary in this thread....cash and GICs are also *highly* risky as well....). Putting all your eggs in one basket, whether it be in bank accounts, into gold, or entirely into stocks, is the way that people go broke.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote: Putting all your eggs in one basket, whether it be in bank accounts, into gold, or entirely into stocks, is the way that people go broke.

We will see about that Mark, I am 100% in stocks.
I will report back in 10 years to let you know if I am broke or not.
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ACC-Major wrote: REIT's are the same as before 2008. They increased in value because investors think they are safe (due to distributions) and their borrowing costs went down significantly. Most of these REIT's are highly leveraged.

In that sense, once rates start to hike, REITs will plummet, if I'm understanding this correctly. The rates have nowhere to go but up right now...
Tons of things for sale!
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Jon Lai wrote: In that sense, once rates start to hike, REITs will plummet, if I'm understanding this correctly. The rates have nowhere to go but up right now...

Depending on how these REIT's are run, I wouldn't use the word "plummet" because the management are aware that rates have nowhere to go but up. I would say that, by the time rates goes up, these REIT's won't be as attractive as they are now because any rate increase eats directly into their profits.
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Jon Lai wrote: In that sense, once rates start to hike, REITs will plummet, if I'm understanding this correctly. The rates have nowhere to go but up right now...

I'd be more concerned about the retaillers basically holding a gun to the head of these REIT owners because the economic power will soon shift.

The REITs are only as good as the businesses that they contain. The malls these days are full of, for instance, Bell wireless retail stores (just to use an example), and other uses that probably don't really need a fancy retail presence (ie: its easy enough to order an iPhone off the web for next-day delivery).
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Oct 19, 2011
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Mark77 wrote: Putting all your eggs in one basket, whether it be in bank accounts, into gold, or entirely into stocks, is the way that people go broke.

People go broke by being idiots
Being an idiot = listening to any of the advices in this thread so far , especially yours


The thread starter is looking for a place to park his house sale proceeding for a short term , and seems to have a very low risk tolerance

He got no business whatsoever entering the stock market , metals and definitely not dealing with garbage such as REIT's


Thread starter splitting his eggs within 2% savings account (100K each in order to be fully covered by CDIC) for one year will be far smarter idea then getting raped in the markets , and people WILL get raped in the markets in upcoming year

Thread starter can also hope for another very decent opportunity like there was last month , where the AUD went momentarily below the CAD , and convert a decent amount
AUD paying 4%+ interest even after the recent interest cut and definitely have a huge potential upside , especially if you score it below par

That being said , and this is obviously critical - you MUST make sure you won't get raped by the spreads when you buy and sell
If you do a little bit of shopping , you will be able to do the conversions at few pips above spot
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ACC-Major wrote: We will see about that Mark, I am 100% in stocks.
I will report back in 10 years to let you know if I am broke or not.

thread is about one year investment. start something else if you want to discuss 10 year investments.

IMO for one year there is not much you can do, at least try to beat inflation...
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Mark77 wrote: Why are you so obsessed with 'principal'? "Rolling the dice on stocks"? Stocks are a whole heck of a lot less risky and more diversified than a single house in Mississauga ever was, and offer more diversity than sitting 100% in cash or GICs.

My recommendation, as always, is a balanced portfolio of cost-efficient investments, usually ETFs, but can include, among other things, REITs (which are *highly* risky...despite claims to the contrary in this thread....cash and GICs are also *highly* risky as well....). Putting all your eggs in one basket, whether it be in bank accounts, into gold, or entirely into stocks, is the way that people go broke.

Just curious here, why are cash and GICs "highly risky"? What could happen other than being outpaced by inflation?
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MarcoMar1 wrote: People go broke by being idiots
Being an idiot = listening to any of the advices in this thread so far , especially yours
...
Thread starter can also hope for another very decent opportunity like there was last month , where the AUD went momentarily below the CAD , and convert a decent amount
AUD paying 4%+ interest even after the recent interest cut and definitely have a huge potential upside , especially if you score it below par...
So you're saying that he'll go broke if he listens to other people, but you've got the nice safe suggestion of trying to score on a currency exchange timing play?

Jayyyyyzus, Mary and Joseph.
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Nukey wrote: Just curious here, why are cash and GICs "highly risky"? What could happen other than being outpaced by inflation?

You just answered your own question :) . Cash and GICs also have huge concentrated counterparty risk.
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theBeachBoy wrote: thread is about one year investment. start something else if you want to discuss 10 year investments.

IMO for one year there is not much you can do, at least try to beat inflation...

Exactly! iF the OP has only a one year horizon, the only place he should be putting his capital is in a high interest bank account....period. Do not listen to the nimrods in this thread who are suggesting to put all your money into the stock market or REITs - there is far too much volatility in equity markets these days (even just a whisper of something happening in Europe can causes the market and other risk assets to lose triple digits). Given the way things are going you'll never have any piece of mind knowing your capital is intact.
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gomyone wrote: Exactly! iF the OP has only a one year horizon, the only place he should be putting his capital is in a high interest bank account....period. Do not listen to the nimrods in this thread who are suggesting to put all your money into the stock market or REITs - there is far too much volatility in equity markets these days (even just a whisper of something happening in Europe can causes the market and other risk assets to lose triple digits). Given the way things are going you'll never have any piece of mind knowing your capital is intact.

Money != capital. Currency devaluations around the world typically happen suddenly, typically when a maximum number of people believe that cash (ie: liabiities of the government) is the only asset class that can possibly protect wealth, like the point of view you're pushing.
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Mark77 wrote: Money != capital. Currency devaluations around the world typically happen suddenly, typically when a maximum number of people believe that cash (ie: liabiities of the government) is the only asset class that can possibly protect wealth, like the point of view you're pushing.

:facepalm: There's nothing being "pushed" - if the OP wants his cash for use within a year he shouldn't be looking any farther than a bank account or any other near cash equivalent. If he wants to take on more risk, then he could certainly step up and invest it all in the stock market - which you seem to be "pushing" - but that would be very foolish - especially given the significant volatility in capital markets.
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gomyone wrote: :facepalm: There's nothing being "pushed" - if the OP wants his cash for use within a year he shouldn't be looking any farther than a bank account or any other near cash equivalent. If he wants to take on more risk, then he could certainly step up and invest it all in the stock market - which you seem to be "pushing" - but that would be very foolish - especially given the significant volatility in capital markets.

Maybe its not the 'market' that's volatile, but rather, the value of cash is volatile. It all depends upon your particular reference point, or 'datum'. A broadly diversified portfolio (which includes various types of debt and equity instruments including cash) is the best way of preserving capital and value over almost any period of time. To call me a 'nimrod' for suggesting that, and then committing the same sin as you derided of others -- suggesting full concentration in one particular asset class, strikes me as the epitome of irresponsible. Especially when you have a blatent conflict-of-interest, working for a company that relies upon people putting substantial amounts of cash (ie: house sale proceeds) into bank accounts to be used for the financing of mortgages on which people like you expect to earn a profit.
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It won't be a lot, but at least some of it should go into a TFSA.

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