I have some extra money, which I plan to use towards buying a house soon enough. Soon enough is probably about 2 months away. What would you suggest as a good way to save it. Should I buy any mutual funds / stocks or should I put it in a high interest savings account. Any suggestions are welcome.
Thanks
Any money you know you will need in the next two years, let alone two months, should be in a nice safe bank or money market account. Stock investments should be a mininum 3-5 year time horizon (unless you can make a living as a day trader, of course).
-Mark Bole
Eh. What are you going to do if you put the money in mutual funds or stocks, and the market suddenly drops 20% or more in the next 2 months? (See October 19, 1987....) If you want to be sure of having money to spend in 2 months, put it in a nice safe FDIC-insured savings account.
-Sandra the cynic
"Mark Bole" wrote
I think authorities tend to recommend more like a minimum ten year horizon. Consider the following average, annualized returns from 1871-20005 for all possible periods of length shown:
3-year = 9% plus-or-minus 10% 5-year = 9% plus-or-minus 8% 10-year = 9% plus-or-minus 5% 15-year = 9% plus-or-minus 4%See
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