How would you invest 180K CAD somewhere if you were in my shoes?

[barbarawang_]

I've ended up holding 180K in cash which is not a good thing. As I have been losing it to inflation. But, I do have a full-time job that takes most of my time. I do not know how to put it to work, that is why I asked you, folks.

A little details, I am in my 30s, not settled down, live in Vancouver. I am not sure if I am going to stay in Vancouver for every, thinking to move to the US. But, I have not bought any house ever in Canada. So, that would be a good investment to buy a condo and rent it out or live inside it myself. But, that is a big decision for me and this is my life-saving. The housing market is almost at its highest, and also if you want to rent it out is a different story.

I have only some stock investment last year in my portfolio which I made a good profit so far, and still buying here and there if I find good stock. So, I have put around 70K in my stock. I cannot put more money there as I feel like most of the things are overpriced in the stock market currently. And, I am not planning to sell them, those are solid companies with some of them paying me a dividend of 5% to 8%. So, I've ended up with 180K in cash in my account.

I can get still a decent one-bedroom apartment for 650K, and pay around 150K as a down payment. Something like this https://www.rew.ca/properties/3342166/1208-833-homer-street-vancouver-bc?property_click=map , it is listed for $600K, and let's say I put $150K as a downpayment, my monthly mortgage would be $1,800 plus $400 for maintenance fee, it would be a total amount of $2.2K per month. I can rent it out for $2K for sure.

I see the risk is minimum, because, this is downtown if the real estate market crashes it can go down to $550K ish, but if I hold it for 10-15 years, there is no way I can lose money.

Edited, added real estate example.

 

[jesseman]

@barbarawang_ IMHO the market is seriously overvalued right now. I have nothing in the market. I've paid down debt and am also sitting on a pile of cash waiting for inflation and aggregate household debt to bite people in the ass. Once the lockdown is over, money is going to flow out of the market as people take trips and go to all the restaurants, resulting in a sell off. Losing 2% to inflation is better than 40% to a correction/crash.

I don't believe the story the market is telling me.

 

[barbarawang_]

@jesseman

IMHO the market is seriously overvalued right now. I have nothing in the market.

I totally agree with you that the market is overvalued, but most of them are because of inflation. So 180K I have last year is not the same as this year, inflation already beat me.

It is a good point, I've thought about it, money is going to flow out of the market, I can pick up more stocks, but I cannot put all in the stock. Also, There is going to be a pullback, but 40% is the upper range I guess.

 

[jesseman]

@barbarawang_ Don't worry about what the market did last year and what you could have made. You'll drive yourself crazy playing that game.

 

[rockey_f_squirrell]

@barbarawang_ Crypto market taking a large dip right now, great time to get in. Buy bitcoin and ethereum. Some alts if you are willing to make some risks

 

[tmc1284]

@barbarawang_ The standard answer is if you do not want to be active in managing your investments an all in one etf with low fees is your best bet. XEQU, XGRO, XBAL or the vanguard versions VEQU, VGRO, VBAL.

These basically hold a bit of most major stocks around the world and some bonds. You just buy them and do nothing. You get a dividend and capital growth.

 

[barbarawang_]

@tmc1284

These basically hold a bit of most major stocks around the world and some bonds. You just buy them and do nothing. You get a dividend and capital growth.

I do not have any real estate or any things else in my portfolio. These are my holding su, bp, t, dlaky, xom, mj, ac.to, which I am up between 30% to 70%. Thanks for the advice, I can buy more for sure. Though I do not have the stomach to put all my money in stock,

 

[felly]

@tmc1284 And actually now would be a good time to get in as we should see these tremulous times in all economies passing in the next 12-18 months. Either way, a managed portfolio would be well diverse or if you want to choose yourself, make sure you have some dividends in there, a bit of bonds, standard to have some gold/ other metals.

 

[adryan]

@felly I would do this. All in one world market etf, plus bonds, plus precious metals, plus real estate but the bulk of it will be in the stock market given your time horizon of holding it as a life savings and assuming you have the stomach for the market variability. There is a guiding formula somewhere. I think its 120 minus your age which will equal a number that should be the percentage of your holding in the stock market. Then rebalance the portfolio annually to achieve that percentage. Yea, thats what I would do. But yea bro Vancouver market is too expensive. Best of luck!

 

[barbarawang_]

@adryan

and assuming you have the stomach for the market variabilit

my main problem is how to balance my portfolio, I do not have the stomach to put it all in the stock market. I feel real estate is missing from my portfolio but everything is over priced. I can get still a decent one-bedroom apartment for 650K, and pay around 150K as a down payment.

Something like this https://www.rew.ca/properties/3342166/1208-833-homer-street-vancouver-bc?property_click=map , it is listed for $600K, and let's say I put $150K as downpayment, my monthly mortgage would be $1,800 plus $400 for maintenance fee, it would be a total amount of $2.2K per month. I can rent it out for $2K for sure.

I see the risk is minimum, because, this is downtown, if the realstate market crashes it can go down to $550K ish, but if I hold it for 10-15 years, there is no way I can loss money.