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Author: theHedgehog Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35365  
Subject: Re: short term savings strategy Date: 4/14/2008 1:46 PM
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I'm getting the feeling that if this isn't money that I'll need for a long time for something like retirement in a retirement account, yes, but otherwise, it's a bad idea because of market volatility.

It depends. If you only have about 6 months worth of expenses to invest, then that should be in a near-zero risk vehicle, such as a CD. OTOH, if you have several years worth of expenses in hand, then investing in a range of indexes becomes appropriate. I continue to believe that foreign and emerging markets will out-perform US investments in the years ahead, so I have a mix of ETFs.

As Loki indicated, many of us have our investments in taxable accounts. If you have the choice, then dividend yielding investments should be in a tax-deferred account. Too many people get that part backwards, or even worse, put bond funds in their 401k accounts.

Hedge
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