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31-08-2012, 10:43 AM
(31-08-2012, 10:29 AM)money Wrote:(31-08-2012, 09:35 AM)snowcap Wrote: ...
So if you are going to need money in 1 year's time, and the stock price drops 20% you're quite screwed.
I guess the prudent thing to do for money that you will need in 1 year's time should just be kept in the bank or go for a treasury bill that matures in 1 year. It should not be invested in the stockmarket, for you will be forced to sell for a loss if the market tanks
completely agree. liquidity needs should not be invested in the stock market else you end up being a price taker.
fixed deposits, good ol' cash in bank. personally i try to keep at least 6 months of commitments in cash, with anything else above being investable.