I sold my property and I have moved back to the UK where I plan to buy property in London. The market is currently declining due to uncertainty caused by the Brexit negotiations. I have decided to sit on the sidelines and wait until we find a property that makes sense to invest in. I anticipate that this may take from one to three years.

I'm fortunate to have accumulated enough funds to buy the property outright. In the meantime, I need to decide where to put the cash that is sitting around. I hold a number of stock options (vested and unvested) in the company I work for and they account for a significant portion of my personal portfolio (~30%). I also have a small amount invested in some specific equities which I believe strongly in (~2%).

I'm looking for advice and ideas on an appropriate investment strategy for my goals. Thanks in advance!

  • Are the options part of your down payment savings, or is it all in "cash"?
    – D Stanley
    Sep 4, 2018 at 14:36
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    Are you committed to waiting at least 1-3 years due to uncertainty, or might you buy tomorrow if the right house presented itself?
    – Hart CO
    Sep 4, 2018 at 14:47
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    In the immediate interim, be aware that the FSCS protection for "Temporary High Balances" (above £85k) -- will only cover you for six months.
    – TripeHound
    Sep 4, 2018 at 15:28
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    If you’re positing a continued decline in property prices, any non-negative interest rate on a bank deposit would increase your expected purchasing power at very low risk.
    – Lawrence
    Sep 4, 2018 at 15:29
  • @HartCO I wouldn’t rule out the right property (at the right price) if possible. It would be good to have the flexibility to make that happen if needed (that said if we really needed extra cash desperately we could probably borrow from family for some time).
    – jkp
    Sep 6, 2018 at 9:19

2 Answers 2


This is very opinion based and also a future reader may view this answer and the question in the light of their current market conditions. Despite all that you there are some principles that remain timeless.

The first is your core question boils down to one of risk. Do you accept volatility risk of being heavily invested in equities for a short term (1-3 years)? Or do you accept a deflationary risk? The deflationary risk is real in that housing prices could increase much faster than safe and secure investments or even equities.

The thing I like least about the hints you provide to the make up of your portfolio is the amount of your net worth is tied up in a single company stock. Not only is your income tied to this employer, but also 30% of your portfolio. I would be shooting for the 5-10% range, and error on the side of the lower amount as you will continue to vest more options.

The second thing I dislike about your portfolio is the individual shares that you own. It would be far safer to invest in the broader market.

If it was me, I would do the following for money earmarked to buy a house:

30-60% in a high interest savings account. This will earn you about 1.5%-2% 60-35% in a diversified portfolio of stocks. In the US, something like an S&P500 fund.
5-10% in my company stock options only if I really like the outlook of the company. If not then zero.

I like this plan, because if you lose your job, the company options become worthless, and the stocks tank to 40% of their current value you will still have a healthy down payment for the home. Provided you can secure subsequent employment, you should have no problem obtaining a mortgage.

If things continue to grow, well then you also get growth on those fund so invested.

I would also use a different allocation for money that is not earmarked for purchasing a home.

Also I would tend to use REITs to provide a bridge between the safe savings and equities, but you said that you expect real estate prices to drop, so that probably isn't a good idea.

  • Some good advice in there. I agree about the portion invested in my employer being too high. That said when I did the calculations, taking into account the tax implications it seemed that there is a bigger upside opportunity with those options as opposed to selling them and diversifying into other equities. Comes at the cost of over exposure though. I think on balance your suggestion to bring that number down makes sense though.
    – jkp
    Sep 5, 2018 at 14:50
  • Other things to take into account which make things tricky are exchange rate risk which isn’t hard to hedge without tying up a lot of cash.
    – jkp
    Sep 5, 2018 at 14:51
  • Also what about counter party risk? An attractive option for fairly hands off money management would be something like a vanguard lifestyle fund but tying up 30% of my wealth with a single provider is somewhat risky no?
    – jkp
    Sep 5, 2018 at 14:52

I would put the money to work in real estate market in the US. A realty shares type service may be a bit of a lower risk option, but I would be looking for a reputable real estate investor (not unlike myself) that needs capital to make acquire or rehab more rental properties. I personally user quite a bit of 10% APR money. My source is a pediatric dentist as my primary and although it is expensive, it is worth it. There are plenty of flippers (not my cup of tea) and other real estate investors who could use a hard money loan or even a longer term loan at a higher rate that is secured by a tangible asset.

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