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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76074  
Subject: Re: Investing a lump sum Date: 10/2/2000 5:25 PM
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Definitely roll the 401k into an IRA, you have much better options on investments. A simple S&P 500 index fund would suffice until you've learned more about investing.

The $175k is another story depending upon what your future plans are. The majority here would say any money needed in 3-5 years don't need to be in stocks. The chance of recovering from a market downturn are severely lessend by that short time span. And you all are definitely on the cusp of that time span. If you're sure you will be buying a house soon, I wouldn't stray away from CDs or money market accounts. While 5-6% returns pale to the 30+% of some of the stock screens, the money will be there the moment you need it. What if you were planning on buying the house this October or past April but saw your down payment go down with the market? It would be a little disheartening and frustrating.

Also, consider this. Depending on where and what type of house you're buying, the $175k could buy it out right, i.e., no mortgage. A very liberating experience.

JLC
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