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How do I play the term deposit game?

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I am sick of shares for my super fund and simply want to invest in term deposits until the worst of this stock market drama is out of the way. What do you think and how do I best play the term deposit game?

Is this a good idea? It’s hard to say as you have not given me enough information about you but say if you had $1 million in your super fund and you were 65 and you needed $50,000 a year to live and be happy, then given the fact that the best one-year term deposit rate is at ING Direct at 5.9 per cent, then you would be getting $59,000 for playing it safe. On the other hand, if you are 40 years of age and have 25 years to retirement, then the term deposit strategy is premature madness. You could easily be in a high growth strategy, which means your super sum can go up and down big time but over time I would bet it rises nicely. If you got a great run up on your super for a few years, you could then go conservative and that might prove to be a smart way of building your super but I must admit trying to time the market can be a very tricky play that many an expert has mucked up.


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Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.


Published on: Friday, April 27, 2012

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