Seeking Advice to Use Some of The Investment Property Equity Money in Index Funds

knowwhat on 09/08/2020 - 22:10

Hello Ozbargainers,

Background
I currently refinanced my investment property loan. As I had made extra payments earlier, I am able to access some extra cash which is sitting in my offset account. (approx 50k).

Situation:
I am planning to invest this extra cash into index funds and had the following questions:

Is it good idea to invest now or would it be too risky, given the current scenario?

I am thinking of Vanguard at the moment, but not sure which product should I go for? Looking for product/s with good dividends and/or growth, but happy to consider other products. I am thinking of minimum 5 years investment plan at this stage. Any recommendations?

Any other product apart from Vanguard, I should be considering?

Should I go for drip feeding- XX amount every month for the next 5 years or just go big (approx 15k - risk tolerance at this stage) and then drip feed?

The other question I had , whether I can claim tax deduction on the interest paid on the amount used from this investment loan to purchase stocks/index funds? What should I be considering in setting up or should be aware of from legal tax point of view?

Any other tips fellow ozbargainers.

Many thanks for your insights.

Financial

Comments

  • kahn on 09/08/2020 - 23:03
    -1

    VAP (Vanguard Australian Popcorn).

    • knowwhat on 10/08/2020 - 09:34

      That was insightful

  • vikvance on 10/08/2020 - 08:16
    +3

    Any other tips fellow ozbargainers.

    My tip is that you should do some study of the stock market & investment strategies and then make your own decisions about when, where & how much to invest.

    No one knows the future & everyone has their own tolerance for risk.

    For example, let's say, the stock market drops by 80% (it has happened in the past, when bubbles have burst). Would you be able to know when this happening, and when to get out quickly, and when to hold, and how to appropriately diversify your risk ?

    If you have no interest in studying the stock market yourself, then my tip is to hire a financial planner, who will do this work for you.

    • knowwhat on 10/08/2020 - 09:36

      Thanks for the sound advice. I agree.
      Doing my own research as well, but happy to learn from others over here which will offer me different perspective and also ensure if I have not missed anything.

  • neoleo on 10/08/2020 - 11:47
    -3

    A lot of news said that stock markets will go down. Higher unemployment rate globally, more businesses go bankrupt, second wave lockdown, mortgage disaster after the end of mortgage holiday, end of jobkeeper payment later next year maybe, etc. Markets have recovered after last March crash. We know for sure when we have the Covid19 vaccine ready globally, global economy should accelerate faster.

    Diversify assets, not just index fund investment, but also cryptocurrency ;-). Invest in Bitcoin, Ethereum, Ripple, Cardano, Binance, Huobi Token, Chainlink. For other coins/tokens, DYOR (do your own research). Read a lot of news by googling. You'll thank me later, maybe at least by the end of next year.

  • IntoTheNewWorld on 11/08/2020 - 12:40

    In terms of deductions, I would look to make sure that the funds come straight from your loan account into your brokerage account, with no detours. In particular if you’ve put the funds into an offset account that has other funds, that money is now mixed and deductions are compromised. Perhaps post this on PropertyChat forums as well - plenty of information there.

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