I am saving for my first home, and I currently have about 81k in VTSAX. I plan to use most of it for a down payment in 3 to 4 years, around 120k, and I will be adding more as I go. Since the market feels highly valued, should I move some money into VBTLX to lower risk, since I will need the cash sooner? Or should I just keep it in VTSAX and not worry about timing the market? I am open to other strategies, too. I expect to save about 70k a year, so I should reach my goal either way, which makes me wonder if it makes sense to just stay more aggressive.
Diversifying investments for down payment
byu/Honest-Tough-3647 ininvesting
Posted by Honest-Tough-3647
2 Comments
The money you need in 3-4 years should be invested more conservatively than something you need in 30-40 years, irrespective of how the “market feels”.
Invest all of your down payment money in cash, cash equivalents, or short term bonds.
You should have enough time to stack new dollars without having to sell your appreciated stock.