Author Topic: Risk Dilemma - saving for property vs stock investing  (Read 1328 times)

Albatross

  • 5 O'Clock Shadow
  • *
  • Posts: 46
Risk Dilemma - saving for property vs stock investing
« on: May 09, 2016, 12:06:40 AM »
Hello all! First time posting and all that.

I am based in Hong Kong and simply put, I have not been adding to my index funds since late 2014. The reason is that I plan on buying a flat here in HK sometime in 2017 or 2018 and have therefore been saving for a down-payment (currently at a minimum of 40% in HK).

I initially (2 years ago) allocated about 75% of my savings to index funds, with 20% in high interest deposits and bonds, 5% cash. I now have about 50% in index funds, 10% in high interest deposits and the 40% cash. My index fund allocation is roughly 65% HSI (HK), 15% Asia-pacific ex-Japan, 15% Europe, 5% Indonesia.

My dilemma is that of course I want to invest my cash and grow it in index funds, but then I risk having to crystallise a loss if the market is down and I have a property I want to buy. On the other hand I want some form of security for a down payment, and cash is just about the safest thing out there, but it's a guaranteed loss against inflation lol.

The fact is my whole index fund portfolio is down (around 5%) from a brutal start to 2016, so I don't really want to sell that yet (at least not until I make a theoretical 7% year on year).

This isn't a market timing question (or so I think), it's more about risk management for real estate deposit - I think I know what to do but... what would you do?

velocistar237

  • Handlebar Stache
  • *****
  • Posts: 1422
  • Location: Metro Boston
Re: Risk Dilemma - saving for property vs stock investing
« Reply #1 on: May 09, 2016, 06:51:25 AM »
There's no way to both put the money in volatile investments and make sure there's a gain on your schedule. If you're willing to forgo buying if the market is down, or if you're willing to risk a loss, feel free to invest. Putting short-term money in a savings account or CD is what's usually recommended.

See the top item here.
https://www.reddit.com/r/personalfinance/wiki/investing

And welcome!

Albatross

  • 5 O'Clock Shadow
  • *
  • Posts: 46
Re: Risk Dilemma - saving for property vs stock investing
« Reply #2 on: May 09, 2016, 10:45:13 PM »
Thanks Velocistar!

That was sort of what I thought. I am in two minds about selling my index funds at a loss, but i don't need the money just yet so i'll see how it goes.