I'm a long time lurker, first time poster. Please forgive my mistakes since english is only a second language for me (I live in Quebec).
I'm 25 years old and currently renting an appartment with my girlfriend. We're planning on buying a small house within the next year, but we're not in a hurry. I absolutely want to have a 20% downpayment when we do buy, otherwise I have to insure my loan with the CMHC.
Currently, we have about 40K$ in financial assets and no dept (12K$ in stocks and 28K$ in bonds or other short-term funds, all in a tax-free account). There is a 80 % possibility that we get 110K$ in pure cash in the next 6-12 months for some reason, but there is still a 20% possibility that we get absolutely nothing. Because of that, I really don't know what to do with the 40K$ I have right now.
My question is: should I invest the 28K$ i have in bonds and short-term funds in a stock index fund? Right now, the index fund I use is based on the S&P TSX 60 Capped. It has been going down since february 2011 and it's probably at its lowest right now, unless some worldwide bad things happen again (see by yourself:
http://finance.yahoo.com/echarts?s=%5ESPTSECP+Interactive#symbol=%5Esptsecp;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;) I believe that it could be the right time to buy. It might not go up right now, but it will eventually, would it be in 1, 2 or 3 years.
The problem I see with this strategy is that if we finally don't have the 110K$ in cash, we will not have enough liquidity available for the 20% downpayment if the stocks haven't gone up in a year or so. Should I take that risk? I am comfortable with it, unless you tell me it's totally stupid.
Also, if you have any advice on where to invest in Canada other than in an Index fund based on the S&P TSX 60 (unfortunately heavily concentrated in energy and materials), I'd like to know.