Re: Suggestions for mid term savings/investments?

On May 9, 4:04 pm, jdbs...@[EMAIL PROTECTED]
 wrote:
> I know the majority of the discussion in this group is about short
> term (emergency savings) or long term (retirement) investing.  Are
> there any recommendations for investing on a mid term horizon, maybe 3
> to 5 years?  My wife and I both contribute well over matching to our
> 401ks.  We've maxed out our roth for 2008.  We have 40k which is our
> emergency/home improvement/car fund in a high interest savings account
> earning 4%.

Based on your posts, I would not consider most of your $40k to be
"midterm". You could need the "emergency" fund tomorrow, right? Is it
the same story for the "car" fund? Is there a risk that your
transmission could go out 6 months from now and cost $1500? Are you
under warranty for the next 5 years? It sounds like the only part of
your fund that is truly "midterm" MIGHT be the home improvement
portion.

I'm all for making my dollars work as hard as possible, but remember
that emergency funds aren't about the highest return but rather the
lowest volatility. Admittedly, I don't know the specifics of your
situation, but I suggest you move no more than the amount you are
POSITIVE you will not need in the near future. IMO, squeezing out an
extra 1 or 2 percent just isn't worth the potential principal loss.

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