What else can you do with your cash ?
April 17th, 2008 | by winsonlee |I have a friend who asked me where else can he invest other then putting cash in fixed deposit given the uncertain economies of the world. Seriously during economy down turn, putting cash in the bank is not a bad idea especially when they are giving 7.75% pa interest. In http://winson-talk.com/2008/01/30/lessons-from-the-1987-market-crash/ article, I did mention that having cash on hand is KING during the economy down turn. Not necessary that you consider your self making an investment by putting money somewhere that gives you return. Holding on the cash that you have during economy downturn is consider as an investment as well. But of course i call it as a future investment. When the economy is at the bottom, to make an investment you will need cash to buy property or shares. At this point of time especially when the market is volatile, throw all the shares away and keep as much cash as possible. Opportunity is yet to come!! If you are holding on to the shares now, a year later you wouldn’t have the money to buy even if the shares or property is cheap.
Shares and Unit Trust is definitely a no as it is heading no where at this point of time. According to the past one year report that I saw for various funds, funds manager is making a lost regardless if it is in local or international market. What bout property ? With the interest at 9.37%pa, would you borrow to buy one especially the property price is at the peak ? The only thing that I have not mention will be commodities. With the resource boom, there are still demands for commodities. Other then fixed deposit, converting the cash you have on hand into gold is not a bad idea. On Apr 16,2008, gold price closed at USD944.17. On February 8,2002, gold price is only at USD 300. It actually broke the USD 1000 mark on March 17,2008. Everyone knows that the market is going down but have you actually heard of people mentioning that gold price is going down ? I guess not. According to http://www.goldprice.org/silver-and-gold-prices/2008/04/will-gold-deflate-seriously-during.html, gold primary trend is up targeting at lease $3,130.00.
