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Question Cash-equivalent investment

M

manilobino

New member
Jun 6, 2021
14
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Earth
#1
Hi,

If you have a sum that you want to keep safe, by investing it somehow as an alternative to a current account, without investing it into equity/bonds - any suggestions?

Since the sum is more than the bank deosit guarantee (100k eur), a current account is risky.

First priority is funds safety (against a collapsing bank and also against value fluctuations that are not in line with the currency inflation), then funds short term liquidity - at no value loss risk, as with equities for instance, so I guess best case scenario is something with a flat line in the value fluctuation :)

I realize this is not an investment website but I see members here are no strangers to investing and their funds’ security so I figured, why not ask.
 
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#3
Parts of it could be invested in Gold bars or coins, 100K EURO is not much in Gold.

manilobino said:
I realize this is not an investment website but I see members here are no strangers to investing and their funds’ security so I figured, why not ask.
Click to expand...
agree, just post in the proper forums where I have moved this thread to :)
 
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#4
Admin said:
Parts of it could be invested in Gold bars or coins, 100K EURO is not much in Gold.
Click to expand...
Just to clarify, my sum is 7 figs, the 100k eur I mentioned is the bank deposit guarantee - that’s why I don’t consider keeping the funds in the current account as safe - if the bank collapses, so will my money (besides the 100k guarantee).

Gold bars and coins aren’t as liquid as I need them to be - and also, they don’t maintain their price, which is what I’m after.
Admin said:
agree, just post in the proper forums where I have moved this thread to :)
Click to expand...
Sorry, will do!
 
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#5
manilobino said:
Just to clarify, my sum is 7 figs, the 100k eur I mentioned is the bank deposit guarantee - that’s why I don’t consider keeping the funds in the current account as safe - if the bank collapses, so will my money (besides the 100k guarantee).
Click to expand...
For any amount Ultra short term government bond/ treasury etf is best option.
Even Big corporation use the same method.
You can check their annual report .
Cash is always in Ultra short term treasury mutual fund or ETF .
You have to just check entry and exit cost from your bank/broker.
 
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#7
manilobino said:
Just to clarify, my sum is 7 figs, the 100k eur I mentioned is the bank deposit guarantee - that’s why I don’t consider keeping the funds in the current account as safe - if the bank collapses, so will my money (besides the 100k guarantee).

Gold bars and coins aren’t as liquid as I need them to be - and also, they don’t maintain their price, which is what I’m after.

Sorry, will do!
Click to expand...
Gold bullions and coins are as liquid as any other financial instrument in the market, but not if you keep them stored in vaults or under your bed.

there’s vaults in Liechtenstein with even trading platforms in house that can facilitate liquidity if needed.

additionally also in Switzerland precious metals providers with integrated exchange to fiat/gold and vice versa, or even gold/crypto vice versa.

as long as you have the papers in place, selling gold in case of needing liquidity short term is not that difficult.
 
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#8
manilobino said:
Just to clarify, my sum is 7 figs, the 100k eur I mentioned is the bank deposit guarantee - that’s why I don’t consider keeping the funds in the current account as safe - if the bank collapses, so will my money (besides the 100k guarantee).

Gold bars and coins aren’t as liquid as I need them to be - and also, they don’t maintain their price, which is what I’m after.

Sorry, will do!
Click to expand...
Also regarding gold not maintaining the value:

sure but the perspective is only directed to the buyside, considering what’s happening with inflation, interest rates etc in most of major economical players and specially USD, soon to be followed by EURO.

you can diversify also with BTC and just hodl diamond hands style, if you got any high risk tolerance.

In the short future both gold and bitcoin “worth noting not any other crypto, stablecoins and any pump & dump shitcois” will be more valuable then today, also oil, uranium, palladium , platinum...

If you don’t want to expose yourself into investing into such assets directly, you can always invest in etf’s / index funds that follow companies on these sectors.
 
#9
equityone said:
Gold bullions and coins are as liquid as any other financial instrument in the market, but not if you keep them stored in vaults or under your bed.

there’s vaults in Liechtenstein with even trading platforms in house that can facilitate liquidity if needed.

additionally also in Switzerland precious metals providers with integrated exchange to fiat/gold and vice versa, or even gold/crypto vice versa.

as long as you have the papers in place, selling gold in case of needing liquidity short term is not that difficult.
Click to expand...
Theirs some good gold companies in Singapore also that you can buy/sell/store with. I tried one out purchasing a small amount and then selling it back to them about a week later to see what the process was like and it was very simple. They paid me for the gold bar via crypto as i requested about 3 hours after they opened that day.
 
#11
rowena said:
You can buy IGLA ETF which includes only G7 government bonds.
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Because their economy is thriving indeed,
with the yield of gov bonds, by the time inflation does it’s thing, you’re actually loosing money for a bare minimum return...

better to just take a short trip to Monte Carlo , spend a week there and you might have better chances at generating a better yield at a roulette... even if not, at least you get to play high baller for a couple of nights, and not get screwed by governments.
 
#12
equityone said:
Because their economy is thriving indeed,
with the yield of gov bonds, by the time inflation does it’s thing, you’re actually loosing money for a bare minimum return...

better to just take a short trip to Monte Carlo , spend a week there and you might have better chances at generating a better yield at a roulette... even if not, at least you get to play high baller for a couple of nights, and not get screwed by governments.
Click to expand...
Correct but my suggestion is for cash equivalent investment because OP asked this. It is a good way to keep assets very safe but there is a price.
 
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#13
rowena said:
Correct but my suggestion is for cash equivalent investment because OP asked this. It is a good way to keep assets very safe but there is a price.
Click to expand...
It’s the same thing considering he already has cash deposits on his bank, but yeah that might just remove his concern about the bank going down and having securitized only 100k of the total, but financially won’t gain any difference, if not the depreciation will be only slightly smaller with gov bonds compared to him keeping them as cash cash in his current bank or any other bank in that regard.
 
#14
azb1 said:
For any amount Ultra short term government bond/ treasury etf is best option.
Even Big corporation use the same method.
You can check their annual report .
Cash is always in Ultra short term treasury mutual fund or ETF .
You have to just check entry and exit cost from your bank/broker.
Click to expand...
You can buy short-term USD bonds directly from the U.S. Treasury, which lists a number of different options:

https://www.treasurydirect.gov/indiv/research/indepth/tbonds/res_tbond_buy.htm

Another alternative is depositing your physical cash in a private vault in Switzerland. This has become very popular there because of negative interest rates. Many new vaults have been built to accommodate the demand.
 
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#15
I think treasurydirect.gov is not available for non US residents.
However you can buy these bonds in most of brokers (IB, SAXO,...).
It's better to buy bonds directly, bonds ETF have no maturity (can loose value)... or eventually Guggenheim Bulletshares (type of ETF but with maturity).
Anyway, the choice will depend the investment horizon of OP (if he is ready to keep bond untill the maturity).

rowena said:
You can buy IGLA ETF which includes only G7 government bonds.
Click to expand...
IGLA ETF is more risky than ERNA ETF, due to a long duration (>9 years) versus < 1 year for ERNA.
In the KIID, you can see that the risk/reward level is 2/7 for ERNA and 4/7 for IGLA. (ie iShares Core MSCI World UCITS ETF SWDA is 6/7)

equityone said:
Because their economy is thriving indeed,
with the yield of gov bonds, by the time inflation does it’s thing, you’re actually loosing money for a bare minimum return...

better to just take a short trip to Monte Carlo , spend a week there and you might have better chances at generating a better yield at a roulette... even if not, at least you get to play high baller for a couple of nights, and not get screwed by governments.
Click to expand...
Obviously, it's not a good timing for bonds currently (low yield, risk of interest rate hike in the coming months or years). But for the roulette, i'm not sure it's a good way to keep money safe too :D
 
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#16
celizo said:
I think treasurydirect.gov is not available for non US residents.
However you can buy these bonds in most of brokers (IB, SAXO,...).
It's better to buy bonds directly, bonds ETF have no maturity (can loose value)... or eventually Guggenheim Bulletshares (type of ETF but with maturity).
Anyway, the choice will depend the investment horizon of OP (if he is ready to keep bond untill the maturity).


IGLA ETF is more risky than ERNA ETF, due to a long duration (>9 years) versus < 1 year for ERNA.
In the KIID, you can see that the risk/reward level is 2/7 for ERNA and 4/7 for IGLA. (ie iShares Core MSCI World UCITS ETF SWDA is 6/7)


Obviously, it's not a good timing for bonds currently (low yield, risk of interest rate hike in the coming months or years). But for the roulette, i'm not sure it's a good way to keep money safe too :D
Click to expand...
The roulette part was just humor, since he suggested g7 countries bonds when they’re all shattering financially
 
#18
@Martin Everson - your take on the subject will be much appreciated. I read your previous posts where you discuss investing in AAA rated government treasury notes (not sure how that’d work for my case where I want to stick to EUR) and for better liquidity investing in the likes of JPM Euro Liquidity fund.

Is this still relevant in your view?

Do you see any downside to using ETF instead of a mutual fund like the JPM one?
 
#20
manilobino said:
@Martin Everson - your take on the subject will be much appreciated. I read your previous posts where you discuss investing in AAA rated government treasury notes (not sure how that’d work for my case where I want to stick to EUR) and for better liquidity investing in the likes of JPM Euro Liquidity fund.

Is this still relevant in your view?
Click to expand...

Yes my post in 2018 is 100% my view today. I don't hold any dollars and not even a dollar account however. I have all my money in AAA 30year Euro government bonds from Netherlands and Germany that I bought well over a decade ago yielding me around 4%.

manilobino said:
Do you see any downside to using ETF instead of a mutual fund like the JPM one?
Click to expand...

Yes potential lack of liquidity with the ETF if you want to sell. So you need to choose carefully the ETF.
 
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