Hello, long time lurker, first post.
I have been working for 4.5 years now and a stash of roughly 40K cash collecting a 1% interest rate and 80K stocks (SP 500 index fund) in 401K/IRA.
I know I have a lot of cash, and considering I am only 27 I should be allocated into much higher yielding investments. I was saving for a wedding/house down payment, but I am now single so realistically I will not need this money for 2+ years. Problem is, I would really like to keep that money in a relatively safe source in case 2+ years down the road I do settle down. I was thinking of placing the money into an intermediate corporate bond fund from vanguard to have a return greater than inflation and whose value wouldn't vary significantly so 2+ years in the future I have more than my initial amount.
I do not feel like I understand the risk adequately enough to commit to this though. Interest rates should increase here over the next few years and I would expect the price of corporate bonds to decrease because of this, but in a bond fund wouldn't new bonds at the higher interest rates be cycled in as older bonds mature so this effect wouldn't be noticeable? Any advice on how to save for large purchases 2+ in the future?
Thanks