greg219 wrote:Thanks for your input.
Also, maybe you know of an earlier thread where this has been discussed? This certainly can't be the first time someone asked this.
greg219 wrote: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).
inbox788 wrote:Why not buy now? What's missing? Not enough down? Insufficient cash flow? There are many risks to consider and hedge for the mid range period you specify. Usually, near term property purchases assume sufficient down, and preserving that necessary down payment is essential. If you're short, you're trying to build up a down payment with return on investment on the cash you have with additional cash contributions. The risk is that real estate prices rise and the down payment goal run away from you.
inbox788 wrote:What country and currency are you talking about?
inbox788 wrote:So, stocks? Maybe. Short term bonds? Maybe. Long term bonds? No. Too little return, chance of losses from bubble crash.
greg219 wrote: I'm already above the required down payment (30+ % above given today's prices).
Norway and NOK.inbox788 wrote:So, stocks? Maybe. Short term bonds? Maybe. Long term bonds? No. Too little return, chance of losses from bubble crash.
How can stocks be "maybe" and long term bonds "no" -- don't we expect stocks to be more volatile?
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