Assuming you are looking to buy at some point, you’re likely saving up your down payment. Especially after the stress test, some people may be saving up more of a down payment than before in order to get the mortgage down enough to qualify for it.
What to do with the money while you wait to buy? With a well-diversified low-cost investing strategy you should expect a long term annual return of about 6%, but what if your investment drops by a third right when you want to buy? Even worse, these things are correlated so when there are deals in real estate you may be poorly positioned to take advantage.
So what do you do with your down payment? “High” interest savings accounts? REITs to hedge your bets? Stuffed under your mattress? Bitcoins? Silver? Does anyone have a particular strategy or recommendations to share? Should your down payment investment strategy change based on current stock valuations? Is there any way to reasonably invest a down payment at all or should you just keep it in cash and hope for low inflation?