Quote:
Originally Posted by LuxLiving
re: govt. bonds - "you won't have to think about it."
????????
...unless you're me, and you'd stay up all night worrying if that particular government's $ was about to go belly up.
In ref to US govt. bonds, yes, they've been VERY SAFE thus far. Going forward? I'm not as sure as I once was.
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On a long enough time span, EVERY currency goes belly up. If that's the point of contend, then the only thing you can do with a million is to buy and stock up gold bars AT HOME. That's useful when WW3 happens, is it hasn't already.
On a "which if" basis, investment has no value.
Put money in bank: What if bank goes belly up? So many has gone belly up, how do you guarantee that yours won't?
Buy government bonds: What if governments default? what if currencies go under?
Buy stocks: what if company goes belly up? what if market crash? what if currency go under?
Keep cash under your pillow: what if thief visits? what if rats got to your cash?
Keep gold bars at home: what if thief visits? what if neighbours rob?
Buy real estate for rental residual income: what if property prices tank? what if tenant defaults? what about maintenance and tax?
ALL of the above has happened at least once in my lifetime, not on me fortunately (except market crash). In that kind of world, its best not to have that million in the first place. Agree? (this is actually when investment professionals like myself tell you to just surrender the money to us cos we apparently has a better plan for it than you have... NOT!)
If the USD goes under, no assets are safe because everything is still USD linked. Vote RMB as the next world currency? maybe.
Maybe you can advise us all what is the "safest" investment to do with a million now.
You mentioned "keeping the capital safe" as the utmost important thing for the OP, so, let me ask you. Which capital carrying vehicle is "safe" in your opinion? Bank saving account? How about currency risk? how about inflation risk? the longer you keep cash in the bank, the lesser capital you have, surely you should know that. Within less than 2 years, you will see inflation hit the headlines all over the world. So, what is safe?
If you have been to finance school, surely you know EVERYTHING is subject to primary, systemic and idiosyncratic risk. There is no such thing as "safe". For unsophisticated investors like the OP, the only way to protect the money against himself and to protect capital value against inflation and still not have to make sophisticated investment decisions is to invest in bonds such as the TIPS. That way, not only will he have no access to the cash, capital value can also be protected against inflation.