Does this all sound about right?You pretty much have the idea.My only quibble would be about bonds. Most people do not buy individual bonds. Usually too expensive (from commission and spread fees) so people buy bond funds. Totally different animal. A bond fund can and does act just like an equities fund. You can lose capital. Nothing is guaranteed.So I would modify Rule 2 to Treasuries and CDs only.Personally, following the KISS Principle (Keep It Simple Stupid), have only 2 rules: Rule 1: Money needed in 5 years or less keep in a money market fund. Reasoning is you can get close enough interest rates to CDs/Treasuries that the difference is minimal. Plus, you don't have to tie up the money for months/years at a time. Rule 2: Money needed more than 5 years away, stock market/other investments candidate.JLC
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