I'm sure this topic has been discussed previously, but I can't find much on it (except for a short topic
I'm planning to buy my own house/apt five years from now. To be able to put up a decent down payment, I will set aside $75k right away, and for every month for the coming five years, I'll contribute an additional $500. What asset allocation would you suggest for this, and why? Assume I'm currently 100 % in cash.
Intuitively, I wasn't planning on any stock at all, but rather 100 % bonds. But how about different bond maturities -- short vs long maturities?
Note that this investment will be done in a foreign currency (I plan to buy the house/apt in the corresponding foreign country), and that my options when it comes to mutual bond funds essentially are short term funds (maturities average 1 year) vs long term funds (maturities are 2-10 years with an average somewhere in between). For you to be able to relate, the typical long term bond fund I'm considering has averaged 4.5 % over the last 10 years; for the typical short term fund, this number is 2.8 %.
Looking forward to some discussion around this. Thanks!