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A bit OT, but as a reference point, note that Motley Fool would usually suggest putting 5 yrs of living expenses in a laddered maturity bond portfolio. Then you have the interest from the bonds and the maturing bond each year to cover expenses when the market is down and you don't want to sell equities. Five years is usually enough according to the experts.

Of course other strategies such as dividend paying stocks can also help cover short term expenses while the market is down.

As others have noted, cash is not the only way to cover expenses provided other investments have predictable payouts.
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