# What to do with 10k?



## oldtimer123 (Jun 11, 2009)

Hi, love the site and all the posts and responses.

I am hearing about all the buy now when the market is low type of thing. I have 10k just sitting in savings bonds, and I will not need this money for at least a year or more. 

I am wondering what to do with the money? Stocks, Mutual funds, EFTs?
and what ones?

thanks,
oldtimer123


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## FrugalTrader (Oct 13, 2008)

oldtimer, if you "need" the money within a year, I would personally keep the money out of the market. How much are your savings bonds returning?


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## ethos1 (Apr 4, 2009)

oldtimer123 said:


> Hi, love the site and all the posts and responses.
> 
> I am hearing about all the buy now when the market is low type of thing. I have 10k just sitting in savings bonds, and I will not need this money for at least a year or more.
> 
> ...


IMO status quo - leave the money where it is safe and secure


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## canadianbanks (Jun 5, 2009)

I would wait for the next leg down in stock markets and then I may deploy some money there.


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## The_Number (Apr 3, 2009)

I'm with FT and ethos: If you really need it, leave it in the saving account.

However, if you "kind of" need it but "not really" (I have several of these), you might follow what canadianbanks said for the potential for a bigger return, knowing full well that you might lose a significant chunk of that money.


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## Investor (Apr 13, 2009)

canadianbanks said:


> I would wait for the next leg down in stock markets and then I may deploy some money there.


And if it doesn't come? Buy at the top of the market?

There are still good deals if you are looking.


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## Rickson9 (Apr 9, 2009)

oldtimer123 said:


> Hi, love the site and all the posts and responses.
> 
> I am hearing about all the buy now when the market is low type of thing. I have 10k just sitting in savings bonds, and I will not need this money for at least a year or more.
> 
> ...


Low fee index fund.


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## Rickson9 (Apr 9, 2009)

Investor said:


> And if it doesn't come? Buy at the top of the market?
> 
> There are still good deals if you are looking.


I agree.


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## ethos1 (Apr 4, 2009)

Rickson9 said:


> Low fee index fund.


with the $10k for one year time horizon  what net investment return could the person expect to get different over putting it into a GIC or savings bond guaranteed?



oldtimer123 said:


> I have 10k just sitting in savings bonds, and I will not need this money for at least a year or more.
> 
> oldtimer123


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## takingprofits (Apr 13, 2009)

For a one year time horizon I would not be investing in anything unless it is interest bearing. Anything linked to stocks has just as much chance of being lower in one year than higher.

Investing in stocks for short periods is fine for traders but not for those who set time horizons.


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## furgy (Apr 20, 2009)

oldtimer123 said:


> Hi, love the site and all the posts and responses.
> 
> I am hearing about all the buy now when the market is low type of thing. I have 10k just sitting in savings bonds, and I will not need this money for at least a year or more.
> 
> ...


You heard right about buying when the market is low , problem is , that ship has sailed , you may be a little too late , not that there aren't still a few bargains out there.

If you had bought Teck at $4.50 a few months ago as I did , your $10,000 would now be closer to $45,000.

But then hindsight is always 100% isn't it.

An ETF invested in grains will probably do very well this fall according to the stats , weather , demand , doughts in Au. , etc. , I'm counting on it.

A risk managed fund like ING's IRR , paying over 12% dividends , it's cyclical so get in and get out when you feel you have made enough gains , if you miss the timing , wait for the next cycle and collect the 12% as you wait.

Any good Cuban play , considering the way the Obama administration is easing up on Cuban restrictions , one is TRBR , I have already made signifigant gains on this one and taken some profits , there is still lots of upside to it though.

Canadian REIT's are another sector that is already in a rebound , especially ones like TR.UN that were beaten down and are very cheap as well as paying a nice distribution (20% or so at current unit prices), a good indirect play on oil and gas , and get paid while you wait.

These are some of my choices , since you asked.

If you definitely need the money in a year you may want to hold it in a GIC or savings account , in a year you will still have your ten grand guaranteed , plus enough for a nice dinner.

Bigger gains almost always come with bigger risk , one year is not a lot of time unless you plan on trading frequently. 

I used to be a buy and hold kind of guy but in these volatile markets I am finding it is wise to set limits and take some profits when they are there.

I still use my buy and hold strategy for income investments.


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## Dave (Apr 5, 2009)

furgy said:


> Canadian REIT's are another sector that is already in a rebound , especially ones like TR.UN that were beaten down and are very cheap as well as paying a nice distribution (20% or so at current unit prices), a good indirect play on oil and gas , and get paid while you wait.


TR.UN currentyl has a 53% yield on its distribution. It seems too good to be true. I do not know the company but I would research it carefully before investing. Furgy, do you owe it ?

Dave


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## furgy (Apr 20, 2009)

Dave , yes I own it , I have owned a substantial position in it for a couple of years and it has paid well.

It was unfairly beaten down with the current market crisis and uncertainty in Alberta , most big oil companies stated that they needed at least $70 per barrel to break even and many put expansion plans on hold.
Most of those plans are back on as the same companies are now saying that with the current recession , prices are down enough on commodities that they can actually make a profit at $50.

When they cut their distribution (as most trusts did) , the unit price dropped substantially , I used that as an opportunity to add more.

The current price is around $2.20 , the distribution is currently .50 , so it is around 20% annual.

I haven't calculated the NAV for a while , but last I checked it was way undervalued , it should be in the $6 range.

It would all depend on how one would rate the value of their real estate these days.


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## bpither (Apr 27, 2009)

Buy the best high yield fund - Phillips Hager and North. It's the only mutual fund I would own but high yield bonds are a difficult investment to go it alone
The window is closing fast for excellent gains but the distributions are good and there is still a chance for more capital gains. They probably have the best fixed income team in the country which is why RBC was champing at the bit to own this company.


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## ethos1 (Apr 4, 2009)

bpither said:


> Buy the best high yield fund - Phillips Hager and North. It's the only mutual fund I would own but high yield bonds are a difficult investment to go it alone
> The window is closing fast for excellent gains but the distributions are good and there is still a chance for more capital gains. They probably have the best fixed income team in the country which is why RBC was champing at the bit to own this company.


you cant be serious on that recommendation for a one-year hold

Which Mutfund is it from the list below?

http://www.google.com/finance?q=Phillips+Hager+and+North


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## bpither (Apr 27, 2009)

http://www.google.com/finance?q=MUTF_CA:PHN280

PH&N High Yield Bond D

Why not serious? He says for_ at least_ a year whatever that means ... and he lists a number of contenders for his investment - stocks, mutual funds etc. I think this fund is an excellent compromise. Again, it is managed by arguably the best fixed income team in Canada and if he is willing to take on a little risk it is the top choice in this category for _stable_ growth and distributions. From Friday's Globe and Mail ... and remember that as far as I know every fund in this category got mauled in 2008. The author fails to mention how badly all other high yield funds did last year, so whatever spectacular rise they may have had starts from a very low point compared to this fund.

_While PH & N High Yield Bond has lagged most of its peers this year with an 8.7-per-cent return, this conservative, high-yield play was also the best performer in 2008 with a 1.3-per-cent gain.

The fund, which focuses on Canadian corporate issues, is also at the top of the heap over five years with a 6.1-per-cent average annual return for the period ended May 31.

The stronger five-year return stems from securities selection, higher-quality bonds, and lower fees charged to the fund, manager Hanif Mamdani says.

“Our sweet spot is triple-B to double-B,” and that makes up 75 to 80 per cent of the fund, Mr. Mamdani said. “We do our best when the market is going down, or in a bear market.” _


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## el oro (Jun 16, 2009)

Keep your money out of GIC's/savings accounts at this time. There are usually better opportunities, especially now.

For a one year time horizon, gold will be an excellent bet. Even better for longer term. I suggest buying while it's still below $1000... which won't be much longer. 

Avoid ETF's. Go with good quality producers or hold the physical gold yourself if you're up for it. I've offered some gold picks to friends in exchange for 50% of profit but told them I'd cover any losses. Don't invest without conviction.


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## mogul777 (Jun 2, 2009)

ethos1 said:


> you cant be serious on that recommendation for a one-year hold
> 
> Which Mutfund is it from the list below?
> 
> http://www.google.com/finance?q=Phillips+Hager+and+North


Not sure that would be my first choice, but I don't see any great harm in a low risk conservative HYB fund. As the poster noted the capital gain rebound is about over now though. I own another fund in this category.


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## canadianbanks (Jun 5, 2009)

Investor said:


> And if it doesn't come? Buy at the top of the market?


After this rally, the market’s P/E has bounced back up to above 15. 15 is give or take an average P/E. Keep in mind that the E part of P/E is yet to be fully adjusted downwards because of deteriorating economic conditions, which will take the P/E even higher. If you look back at all major bear markets the P/E usually goes below 10 before bottom is reached. This is my reasoning for expecting another leg down.


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## ethos1 (Apr 4, 2009)

$1600 Gold by 2011 said:


> For a one year time horizon, gold will be an excellent bet. Even better for longer term. I suggest buying while it's still below $1000... which won't be much longer.
> 
> Avoid ETF's. Go with good quality producers or hold the physical gold yourself if you're up for it. I've offered some gold picks to friends in exchange for 50% of profit but told them I'd cover any losses. Don't invest without conviction.


does not make sense to me, why not buy the ETF gold index if gold will skyrocket?

one example would be 

http://www.google.com/finance?q=TSE:XGD 

rather than something like a quality gold stock such as

http://www.google.com/finance?q=TSE:ABX

but hey, who am I to judge, physical gold or gold certificates -who really knows which is the better one 

Maybe the world will come to an end and all those holding the gold metal will win, and as you said "$1600 in one-year", I will check back and see


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## el oro (Jun 16, 2009)

ethos1 said:


> does not make sense to me, why not buy the ETF gold index if gold will skyrocket?
> 
> one example would be
> 
> ...


A gold ETF is just fine as an investment if you know for sure that they hold as much gold as they claim. But if you put your money into a gold ETF that is misleading you with their gold backing, expect to lose your money. 

Imagine if you gave your money to an ETF that claimed to have 1 tonne of gold but in reality only held 0.1 tonnes. When the scam is exposed, investors would lose their shirts... but other gold investments would appreciate since no one would invest in that ETF anymore and there is suddenly a 0.9 tonne decrease in supply. Those who wanted to suppress the gold price could have created these ETF's to divert funds from the real gold bullion and from gold miner's.

Why take the risk with ponzi-like schemes when you can own the real thing? Personally, I pick individual companies since the miner's lead the bullion in a gold rally.


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## mogul777 (Jun 2, 2009)

$1600 Gold by 2011 said:


> A gold ETF is just fine as an investment if you know for sure that they hold as much gold as they claim. But if you put your money into a gold ETF that is misleading you with their gold backing, expect to lose your money.
> 
> Imagine if you gave your money to an ETF that claimed to have 1 tonne of gold but in reality only held 0.1 tonnes. When the scam is exposed, investors would lose their shirts... but other gold investments would appreciate since no one would invest in that ETF anymore and there is suddenly a 0.9 tonne decrease in supply. Those who wanted to suppress the gold price could have created these ETF's to divert funds from the real gold bullion and from gold miner's.
> 
> Why take the risk with ponzi-like schemes when you can own the real thing? Personally, I pick individual companies since the miner's lead the bullion in a gold rally.


You mean the miners that make up XGD??


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## el oro (Jun 16, 2009)

Oops, I was talking about the ETF's that hold or claim to hold the bullion. As for the ETF's like XGD, if you want someone else to choose the individual companies for you then they're fine, I guess.

Pick the individual companies if you can though to avoid the laggers that will keep you down. The companies with quality resources in the ground will do even better than the miners so I like to include some of these as well. XGD is primarily the large caps.


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## byronbb (Jun 7, 2009)

Seriously, it's a good title for a book, (assuming the author had something to say).


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