I have the deposit for my house in the stock marke

D

DublinHead54

Registered User
Messages
1,090
In my personal situation, my stock market investments (S&P ETFs) are needed to fund a home purchase in late 2021. I am in the market because of the superior returns over the last number of years, 2019 in particular vs cash. I stayed the course through the recent turmoil and purchased some more to the point my portfolio is now showing a marginal gain of 5%.

I think I am going to let it run for a few more weeks and then get out given my situation. I feel the recovery of the market does not match the current situation, with the ongoing protests, the unknown of a second wave and dependence on fiscal stimulus. I don't want to be sitting staring at a 20% loss in 3 months thinking "How did I not see this coming".
 

This is crazy. Under no circumstances should monies be invested when they’re needed so soon.

You just should not be invested; it’s not even debatable or marginal.
 
Hi DublinBay

The stock market is a long term investment. It can fall dramatically in the short term and can take a long time to recover.

It would be a very exceptional situation to justify being in the stock market within 18 months of your target purchase date.

If your investments are worth €400k and you are planning to buy a house for €200k, it might be ok. But even then, I think you should move the €200k to cash.

If, like most people, you are buying a house for €200k and have a deposit of €60k, you have to ask yourself where you would be if the stock market reduced your deposit to €30k.

And for most people, that would prevent them from buying a house or limit the mortgage they could get. So you should move to cash.

Let's say you have €30k but need €60k for a deposit. That might justify staying in the stock market. A rise will get you onto the ladder sooner but a fall might keep you out of the housing market.

The fact that you are up at the moment is really no reassurance. Anything can happen over the next 18 months.

By the way, why don't you buy a house now?

Brendan
 

Thank you Brendan and others. Let me clarify the situation. My stock market investments form part of a savings plan for a house deposit that has been in place for ~5years (by end of 2021) and represents ~20% of the pot. Given the relative short lifetime I felt that was a fair risk weighting and it may help achieve my goal earlier. I invested x amount on amonthly basis in the same etf.

Obviously I didn't see the market volatility coming and prior to that I was happy to let it run until clossr to the goal being met. Make hay when the sun shines and all that! I have stopped my monthly investments.

Emotionally it would have been difficult to sell at 30% down, now I'm going to get out because the near term risk of the market is way too high in my opinion. A second chance almost.

Regarding buying now, alas I am not a first time buyer and I want a 10% exemption, given the price of houses we are looking at a 20% deposit is quite hefty. My broker has told me deposit exemptions have dried up but hopefully I can get one by the end of the summer to potentially take advantage of any house price decreases.
 
Last edited:
You must log in or register to reply here.
Menu
Log in
Register