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Not needed until buying another house. Could be several years. My grandson. age 28, single, employed and has other funds for emergency. Just needs to park the cash.
What's several years? Less than five? Intermediate municipal bonds or FDIC insured cash account. Otherwise, equity, ideally an index fund. It sounds boring, I know, but I don't have anything to sell you...1
I'd say be careful not to be TOO conservative. I'd feel good, if I were your grandson---putting 1/3 in an FDIC-insured item, prob. a simple CD. Then 1/3 in MAPOX: conservative, balanced, with some bonds to go along with the equities, and a great performance history, with "Moderate" risk, according to Morningstar. But this "moderate" risk is assigned to the fund in a rather tame category of funds. .....Then, put the final 1/3 into MAPIX, with a great pedigree and performance history, and below-average risk, for some more serious growth prospects. Both MAPOX and MAPIX pay quarterly dividends. But what do I know? There are so many other funds out there that I don't know anything about. But this strategy and these particular choices would let me sleep well at night. I own both of these funds and intend to hold them, long-term.
I would consider putting 10-20% in vanguard total bond funds [BND] and the rest in vanguard lifestrategies -TRF 2045s fund. Also follow MF research newsletter may make some sense http://funds-newsletter.com/apr13-newsletter/apr13.htm
Well, the recommendation depends on the time frame and the ability to postpone access to investment if the value is depressed. In your have to have the money available no less than original investment at a moments notice, you will have to invest in short term instruments.
However, I believe with a 3-5 year time frame a conservative allocation fund such as VWINX or GLRBX might be suitable.
1-3 years perhaps an income fund like PONDX or BERIX etc.
Shorter term, bank deposit, money market or perhaps a fund like RPHYX which was profiled here at MFO and there is also an interview recording with the manager.
Comments
http://funds-newsletter.com/apr13-newsletter/apr13.htm
https://personal.vanguard.com/us/funds/vanguard/LifeStrategyList
However, I believe with a 3-5 year time frame a conservative allocation fund such as VWINX or GLRBX might be suitable.
1-3 years perhaps an income fund like PONDX or BERIX etc.
Shorter term, bank deposit, money market or perhaps a fund like RPHYX which was profiled here at MFO and there is also an interview recording with the manager.