£300k.. but only for a while

[adriangs]

Partner and I have £300k from a property that we've sold. It wasn't our main residence (we rent in London and love what we have.. and we'd never be able to afford to buy it or its equivalent at today's prices)

Our plan is to put this £300k back into another property outside of London later in the year, but not yet (for practical reasons I won't bore you with).

What I'm after is considered opinions about what to do with that £300k for a short-ish period of time - say 9 months - without leaving it to rot in a deposit account with inflation starting to look scary.

We have other investments elsewhere.. pensions, ISAs etc. mostly in good-quality investment trusts, so this is not a question about that.. and in any case, investing properly and carefully involves longer timescales.. so we have that covered.

The priority here is what to do with a lump sum like that that is *reasonably* safe.. return *of* capital etc.. but without doing something stupid AND without doing absolutely nothing. E.g... some in NS&I? Some in <something_I've-not-thought-of>?? Some still held as cash.. etc. etc.

Thoughts please
A.

[Gerry557]

Currently inflation seems to be a smaller worry.

[dealtn]

What I'm after is considered opinions about what to do with that £300k for a short-ish period of time - say 9 months - without leaving it to rot in a deposit account with inflation starting to look scary.

The priority here is what to do with a lump sum like that that is *reasonably* safe.. return *of* capital etc.. but without doing something stupid AND without doing absolutely nothing. E.g... some in NS&I? Some in <something_I've-not-thought-of>?? Some still held as cash.. etc. etc.

Thoughts please
A.

Safe, and a return of your capital, will mean something along the lines of rotting in a deposit account I'm afraid. Premium Bonds and NS&I are options, but what you are looking at are savings vehicles, not investing, with those criteria. Such accounts won't provide inflation protection or real returns though. There isn't a magic answer unfortunately.

[88V8]

....what to do with that £300k for a short-ish period of time - say 9 months ...

Put a third each into Shell, BP and DEC (Diversified Energy).
DEC pays over 8% dividend (with W-8BEN) and the price is pretty stable.

That will take you up to December when the oil price will be high again, if indeed it has been low.

For something safer, DEC, and ENQ1 which will pay you 7% interest and is available slightly below par.

I think BAE and Chemring CHG will also be good parking places.

V8

[dealtn]

....what to do with that £300k for a short-ish period of time - say 9 months ...

Put a third each into Shell, BP and DEC (Diversified Energy).
DEC pays over 8% dividend (with W-8BEN) and the price is pretty stable.

That will take you up to December when the oil price will be high again, if indeed it has been low.

For something safer, DEC, and ENQ1 which will pay you 7% interest and is available slightly below par.

I think BAE and Chemring CHG will also be good parking places.

V8

This is a board for beginners, and specifically for someone that has requested "return of capital".

Over the last 12 months the range of low to high in prices has been respectively 14%, 52% and 37% of that low price for your 3 suggestions.

[88V8]

....what to do with that £300k for a short-ish period of time - say 9 months ...

Put a third each into Shell, BP and DEC (Diversified Energy).
DEC pays over 8% dividend (with W-8BEN) and the price is pretty stable.

That will take you up to December when the oil price will be high again, if indeed it has been low.

For something safer, DEC, and ENQ1 which will pay you 7% interest and is available slightly below par.

I think BAE and Chemring CHG will also be good parking places./quote]
This is a board for beginners, and specifically for someone that has requested "return of capital".

Over the last 12 months the range of low to high in prices has been respectively 14%, 52% and 37% of that low price for your 3 suggestions.

Yes, but

We have other investments elsewhere.. pensions, ISAs etc. mostly in good-quality investment trusts, so this is not a question about that.. and in any case, investing properly and carefully involves longer timescales.. so we have that covered.

so not a beginner, and although the prices have moved a bit I think they are a good bet over the timescale.

And given the economic hit to the world economy that's coming from the oil price/supply squeeze, oilies seem a logical refuge.

V8

[DrFfybes]

And given the economic hit to the world economy that's coming from the oil price/supply squeeze, oilies seem a logical refuge.

V8

Or, Summer is coming, Ukraine will all be settled in a fortnight, and oil prices will have halved by June.

If (OK, when) we had cash waiting for us to find the right house, the last thing you want to do is find that after 10 months of searching you're suddenly £30k short. If deposit accounts aren't an option, then 50% VWRL or VEVE and 50% ishares or WisdomTree physical Gold is about as safe and balanced as it gets.

[Gerry557]

I'd take the inflation hit, especially as its going to be less than a year.

Premium Bonds might give you some prizes even a big one.
Cash spread in a couple of accounts to try and stay with in the 85k limits although there might be extra cover for temporary large deposits such as yours. NSI? Regular saving accounts? The latter is small potatos and might need you to be active every month.

As much as I like stock market investment, there is no way that I would risk taking the chance that it would be needed in such a relatively short time. As others have mentioned, you risk losing the house that you find due to events outside of your control.

Inflation is a known that you can account for and might be less than you think. Investing for such a short time with a known goal is a no no for me.

[Padders72]

Much as I love DEC, and I have quite a chunk myself, as noted above it’s swung between below a quid and up to circa 120p while I’ve owned so I can’t see even with its high div yield it’s a particularly good candidate for capital preservation if there is a firm deadline for cashing out.

We live in interesting times unfortunately.

[vand]

I'm afraid there isn't anything that you can safely do to protect your cash from inflation over the short term.

The days where you could stick your money in short dated T-bills or a bank deposit and gain at least an inflationary return are well gone.

This is by design. Our overlords don't want you to horde cash, they want you to either go out and spend it immediately, or buy risky assets with it. Of course, if you choose to put it into risk assets it is almost a coinflip whether it will go up or down over the very short term.

Your options are either to accept that inflation will erode some of your purchasing power, or put it into risk assets like equities and play the long game.