Thanks for the comments. Obviously, if I went to a financial planner the answer would be fixed interest deposits. I thought without being greedy and with an emphasis on good dividend and lower risk shares, I should be able to receive a return closer to 10%. Is a selection of retirement home stock and power companies the way to go. The money is to reduce a mortgage in 1 year but with mortgage interest rates around 4% surely I can do better with shares and could hold longer. The risk for me is quite insignificant.
Thanks for the comments. Obviously, if I went to a financial planner the answer would be fixed interest deposits. I thought without being greedy and with an emphasis on good dividend and lower risk shares, I should be able to receive a return closer to 10%. Is a selection of retirement home stock and power companies the way to go. The money is to reduce a mortgage in 1 year but with mortgage interest rates around 4% surely I can do better with shares and could hold longer. The risk for me is quite insignificant.
If 12 months is not a hard target and you are prepared to hold for longer if the market moves against you then the case for equities looks better. In terms of yield alone, you can beat 4% (especially with imputation credits thrown in) but you should think about how long you would be prepared to hold if the long running bull market decides to crash. Recoveries can take years.
A slightly out-of-the-box alternative would be to buy a good quality share and write call options with strike prices below or close to current market price. The only problem is that I don't think these are available in NZ so you would have to look to the ASX to do this (which means FX risk).
Last edited by traineeinvestor; 23-09-2018 at 11:19 PM.
You might consider doing a financial model of what happens if you leave the money in the stock market for 10 years.
The only reasons i can see not to take advantage of that super cheap loan is either lack of confidence in the alternative investment or the cost of the mortgage on your lifestyle.
If I was to invest $50000 for less than a year would you park this money in NZ shares?
Depends on your risk profile ...one company I currently hold on the ASX is currently being offered 10c per share by the Largest 60% Holder
with the SP trading at only 9c with a good chance the offer will be lifted to appease remaining blocking stake holders(25% signing legal Deed)
Now its never 100% guaranteed it will play out ...but coming across a company under offer from it Biggest holder which has pumped more than 30c AUD per share into the company over the last many years IMHO would be risk worth taking
Geez I've invested more than 60k AUD of Westpac's money into it at 5% floating rates (paid av 7.8c)
Last edited by JBmurc; 23-09-2018 at 11:45 PM.
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
Bookmarks