Publications
Partners
THE situation for short-term savers is a bit tricky at the moment.
A Fin24 user writes:
I am coming out of a cash flow crisis, and looking to buy a car and a house in the next 18 months.
What would be the best course of action? Where should I put my savings?
Ronald King, director of financial planning at PSG Konsult, advises:
With an 18-month investment horizon, it is extremely risky to attempt any investment in equity, especially given your risk capacity that is still low after the cash flow crisis.
Bond funds do not look too attractive, as the probability of interest rate hikes in the next 18 months is higher than decreases. This could cause capital losses.
For that reason, the best investment over an 18-month period is money market funds.
It is, however, recommended that you extend your investment term to at least three years. This will make it possible to also consider absolute return funds that should outperform the money market over this time, with about 2% per annum.
- Fin24
A Fin24 user writes:
I am coming out of a cash flow crisis, and looking to buy a car and a house in the next 18 months.
What would be the best course of action? Where should I put my savings?
Ronald King, director of financial planning at PSG Konsult, advises:
With an 18-month investment horizon, it is extremely risky to attempt any investment in equity, especially given your risk capacity that is still low after the cash flow crisis.
Bond funds do not look too attractive, as the probability of interest rate hikes in the next 18 months is higher than decreases. This could cause capital losses.
For that reason, the best investment over an 18-month period is money market funds.
It is, however, recommended that you extend your investment term to at least three years. This will make it possible to also consider absolute return funds that should outperform the money market over this time, with about 2% per annum.
- Fin24
