To add on to your point, the core issue is that you need to take into account correlated risk when deciding on your investment strategy/risk tolerance. If you'

To add on to your point, the core issue is that you need to take into account correlated risk when deciding on your investment strategy/risk tolerance. If you're at the point where you need to dip into an emergency fund, it's possible (maybe even likely) that the entire financial market is burning. You will need access to capital when nobody has access to capital, which will make borrowing very expensive or impossible.