# How to make your money work for you



## krisbarry (11 August 2006)

Question:

How are people making money now...when the stock market has run out of puff, and the housing market is coming off the boil.

Where are people investing their money?

I cannot seem to find a place to put any money that will actually make any money


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## Realist (11 August 2006)

The ASX is down nearly 10% from its recent highs, BHP is down about 20% from recent highs. Sydney house prices are down nearly 10 to 20% from 2003 highs.

I would think now is not a bad time to invest...

As with any time you need a balance.  I'd be guessing 40% in a term deposit 60% in shares.

Sydney property will be the next to rise, that may be 3 to 5 years away though.


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## Phoenix (11 August 2006)

Two words Short Selling.


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## Ageo (11 August 2006)

Phoenix said:
			
		

> Two words Short Selling.




Indeed


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## professor_frink (11 August 2006)

Business as usual. Buy here, sell there, if I get real lucky I make some money  
But I spend most of my time contemplating becoming a career criminal.


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## carmo (11 August 2006)

Watch the banks they are rising and falling all the time, thats the long and short of it.


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## grumpee boi (11 August 2006)

Do you have an outstanding mortgage?  You could plough as much into that as possible and earn a very nice rate of return depending on your tax bracket.  Gives you time to assess your other options too.  But let's hope Mr. Jenman is not right and that property prices don't slump up to 50% and with it your built up equity.  Advantages and disadvantages - where is the holy grail when you need it.

This is not financial advice as i don't know your personal circumstances.  Always see a qualified adviser.

cheers,
Adam


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## krisbarry (11 August 2006)

no mortgage, just ploughing every little cent I have into my superannuation fund (100% Australian shares - geared at 50.5%).


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## krisbarry (11 August 2006)

At the rate I am going I may end up being homeless and living on a park bench, and shopping at Vinnies, but have plenty of money in the bank for when I am 65  

Jokes aside, I am struggling to find and upside in any market to invest  

The last 4 months in particular have been very difficult, first we have had a war, and interest rate rise (which hurts the market) and now a foiled terriost attack.

So much for the reporting season and massive profits


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## doctorj (11 August 2006)

Realist said:
			
		

> As with any time you need a balance.  I'd be guessing 40% in a term deposit 60% in shares.




I'm interested to know what portion of their portfolio people commit to cash.  I certainly have no where near 40% in cash / fixed interest, do many people get any where near that?

I'm looking at the break down of investments by asset class for a large investment management service and they only have 2% of total funds under management in fixed interest.  I'm sure this is skewed a bit as people are likely to hold cash outside their investment account, but given the large average balance I doubt it would reach anywhere near 40%.


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## Jay-684 (11 August 2006)

Over the past 2-3 years I have had only up to 5% in cash for any decent period of time. If it ever went over 5% that would only be because I had just sold and not yet repurchased.

Currently however after the recent correction I have approx 25-30% in cash. Thats not an investment plan though, rather more of a safeguard, waiting to reinvest in shares.


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## Realist (11 August 2006)

doctorj said:
			
		

> I'm interested to know what portion of their portfolio people commit to cash.  I certainly have no where near 40% in cash / fixed interest, do many people get any where near that?
> 
> I'm looking at the break down of investments by asset class for a large investment management service and they only have 2% of total funds under management in fixed interest.  I'm sure this is skewed a bit as people are likely to hold cash outside their investment account, but given the large average balance I doubt it would reach anywhere near 40%.




Well cash or term deposits are not good investments if you wanna get rich quick.

They sure as hell are safe though. 

You may just find come year end that a term deposit beat the ASX this year.   

The beauty of cash is that when you see a good investment you can buy it. And if you lose your job, the market crashes or you need to spend it it is there waiting.

You aint gonna get rich having money in cash, but the key point is you aint gonna get poor either.  Getting very rich is all very well - you can buy an even nicer car and house - woop-de-do, for most people though it is better to avoid being poor. 

If you have 2% cash then how can you buy an investment? Answer - sell another investment cop the tax and then buy into it. Often not wise.

And if you have 2% in cash and the market plummets, and your company is affected aversely and you lose your job then you are in the poo.   Having cash is safe, having 100% invested is unwise.

Risk versus return - it is up to you. Some people have margin loans and no cash and have made great money the past 3 years.   Some millionaires went bankrupt in 1987 and 2000 (tech) by not having cash.

It depends purely on your circumstances. If you are retired you'd be an idiot not to have cash and term deposits.  If you are 20 years old then yeah maybe even get a margin loan - you go bust so be it.


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## money tree (11 August 2006)

whats wrong with forex as an investment?

with global rates rising, its a great time to be in


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## clowboy (12 August 2006)

Actually you can get rich holding cash..........

It just takes a long time.


You cant beat compounding though.

Anyway why are you looking for investments Stop the Clock, I thought everything was going into your super?


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## The Red Baron (12 August 2006)

I'm holding about 80% in cash at the moment, just in a 6.6% online saver account.

Only a short term thing as i'm trying to learn the sharemarket and hoping for an opportunity to buy my first home.


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## Julia (12 August 2006)

I have almost 50% in cash or fixed interest at present, simply because I'm happier with that while the market is so volatile.  When (if?) the bull market returns I'll happily revert to more shares.  Can't short because of rules relating to SMSF's.

Julia


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## nizar (12 August 2006)

doctorj said:
			
		

> I'm interested to know what portion of their portfolio people commit to cash.  I certainly have no where near 40% in cash / fixed interest, do many people get any where near that?




Im about 25% cash


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