My experience with the stock market is little but I try to minimize fees. So I have a interactivebrokers account with the minimum balance of 10,000 USD made in AUD equivalent and started to make at least monthly investments in iShares S&P 500 Index (IVV.AX) about half a year ago.

So I would like to know what I can do with the remaining required cash balance on interactive brokers as in a better-than-savings-account yet less-risky-than stocks investment while I slowly convert them into ETF positions (~700-1300 AUD/transaction). I will transfer more cash into IB from savings account once it's used up.

My situation: I'm in my late 20s with no dependents and have a good, stable income with low expenses but am solely saving for my retirement personally. In the coming years I would like to buy land and build a house, but I won't do that at any cost. In other words it's not urgent for me.

In total the biggest chunk of my money is on saving accounts (partly gaining interest of 4.15%) and freely accessible to me. Only about ~10% I have in funds in another free depot or the ETF.

I'm happy to continue the monthly or bi-monthly buys of the S&P500 ETF but I don't want to put a big chunk of money into it at once as I would rather like to leave my gun powder for after the next market correction.

If you find anything wrong about my general approach I'm also happy to hear your advice. I read one should never have less than 60% in stocks... that's far from what I have yet stock prices are considered really high too.

  • As you are still young market timing is not you strategy but buy and hold. So buy bi-monthly with your spare money no matter the market situation.
    – user52195
    Commented Jan 10, 2017 at 9:09

2 Answers 2


The standard low-risk/gain very-short-term parking spot these days tends to be a money market account.

However, you have only mentioned stock. For good balance, your portfolio should consider the bond market too. Consider adding a bond index fund to diversify the basic mix, taking up much of that 40%. This will also help stabilize your risk since bonds tend to move opposite stocks (prperhaps just because everyone else is also using them as the main alternative, though there are theoretical arguments why this should be so.)

Eventually you may want to add a small amount of REIT fund to be mix, but that's back on the higher risk side.

(By the way: Trying to guess when the next correction will occur is usually not a winning strategy; guesses tend to go wrong as often as they go right, even for pros. Rather than attempting to "time the market", pick a strategic mix of investments and rebalance periodically to maintain those ratios. There has been debate here about "dollar-cost averaging" -- see other answers -- but that idea may argue for investing and rebalancing in more small chunks rather than a few large ones. I generally actively rebalance once a year or so, and between those times let maintainng the balance suggest which fund(s) new money should go into -- minimal effort and it has worked quite well enough.,)

  • 1
    Excellent last paragraph. To hit it home: what if the market goes up 20% before the next 10% correction occurs?
    – TTT
    Commented Dec 23, 2016 at 16:17

I would refrain from commenting on market timing strategy, but please don't park extra AUD cash in IB.

Park cash in your local bank high interest savings, and get a Margin account at IB.

When you want to pull the trigger, use margin loan to buy stocks immediately, then transfer cash from local bank to IB afterwards.

  • Reading the IB website I thought one cannot have a IB account with less than 10k USD in total value?
    – user640916
    Commented Dec 24, 2016 at 4:42
  • 1
    No that is not true at all.
    – base64
    Commented Dec 24, 2016 at 5:35

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