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Does this mean I'm better off not having any money in a savings account (except perhaps 1 month's expenses or so) and putting that money in stocks and bonds? I'
by cesarbs 10y ago
Does this mean I'm better off not having any money in a savings account (except perhaps 1 month's expenses or so) and putting that money in stocks and bonds? I've been thinking recently of moving (part of) my 5-month emergency fund to intermediate term muni bonds (VWITX specifically). But I'm not sure if that's a good move.
- kspaans 10y agoIANAFA (not a financial advisor :P), but it really depends on your goals and risk tolerance. Sure, interest rates are low but so are inflation rates. Sitting on cash isn't as bad as it used to be if you want instant-access to dollars. If you don't need that 5-month-emergency-fund to grow, you probably don't need to put it in riskier vehicles. I believe putting that fund in VWITX would still give you quick access (on the order of a day or two) to if you needed it. You should look at the size of the fund and weigh the risks: definite loss due to inflation over N years, or the small risk-reward spread of medium-term bonds (i.e. they will probably grow, and you'll be earning interest, but there is a chance you'll be forced to sell at a time when bond prices have dropped).