You are either mis-using the term "emergency funds" or misunderstood the true reasoning behind having emergency funds.
You don't invest emergency funds. They are generally supposed to be around 6 months to a year's worth of expenses, and supposed to sit in a savings account or laddered CDs, boring as hell, but bulletproof from any market fluctuations. The point of emergency funds is to be there 100% intact, losing as little as possible to inflation (thus the CD/savings accounts suggestions instead of gold or dollar bills stuffed in a mattress).
Not sure what the correlation between what you're supposed to be doing with an emergency fund and the Chicken Little "recession is coming" posts. There is always another recession coming. Not a big deal in the least if you know this is normal.
Maybe YOU don't invest an emergency fund, but ours is invested in the stock market.
Our taxable investment accounts are our emergency funds. The only reason we would withdraw from them is if there was an emergency that our typical accounts could not cover.
Then YOU do not have an actual Emergency Fund. Which is fine.
Sigh. I'm not sure why everyone is trying to make the term "emergency fund" something it's not. Again, what you (specific individual) choose to do with your investments/cash or portfolio as a whole is not wrong. But using the specific term "emergency fund" when you actually mean a HELoC or general investments, or don't feel the need to have a low risk account at all and insisting that anyone that isn't following the same pathway is the problem.
For those that are new to all of this, misusing the terminology can being confusing and misleading.
https://www.bogleheads.org/wiki/Emergency_fundFrom the investor's unofficial bible (Bogleheads link above):
An emergency fund is a cash reserve required to meet unanticipated needs for cash, such as medical bills, car or home repair, or job loss. The quantity of emergency funds is usually specified as an integer multiple of monthly expenses, e.g., three months to one year's worth of expenses.
Emergency funds should be placed in a highly liquid, low risk vehicle (e.g., money market, bank savings account).
And calling it wrong to have an actual, as-defined-above emergency fund (instead of using a HELoC, counting on taxable investments, whatever) is wrong in itself. We're not all MMM with extensive lines of credit, ability to make money easily, or able to be as comfortable with the idea of drawing off investments no matter what the market is doing.
All of the commentary after the OP's initial question is about whether having an ER is even necessary... and I get the idea that the OP is confused still as they invested their ER funds into the market
and are still nervous about market drops/recessions. Investing when you're scared of things like a recession is the exact type of mentality that might feel better psychologically for having an ER sitting in the conventional savings/CD accounts - NOT invested in a volatile market.
And for the record... I don't have much of an ER myself. I have sufficient investments where even a 50% drop in the market wouldn't significantly change my drawdown needs in the event of any emergency. But I do know how important it is to use my terminology clearly and try to explain for posterity how this stuff works because I used to be brand new and completely uneducated when it comes to investing and portfolio management. This shit is scary enough when you're new and trying to learn, so trying to be as clear as possible is sort of a public service.