Short-term investment of money from/for house

[FiftyIsTheNewTwenty]

I'm asking this for a friend, who just sold a house, and has $100-200k cash from it that he will use to buy another, but not for awhile -- maybe a year.  What's the best way to make the most of this money, at lowest risk?

[VoteCthulu]

I'd put it in a 12 month CD, which gets about 2% right now. If less than a year, I'd put it an a high interest savings account instead.

[TomJoad]

I am in a similar situation.  I have $100,00 in cash which I plan on using to purchase/start a small business when my corporate job goes away which will be from 6 months to 4 years.  I cannot lose any of this money, same advice?   I almost lost my job in the summer but they restructured and I doubled my sales territory and income. I'm saving every penny and can't pass up the extra income. 

[VoteCthulu]

Yes, if you can't lose any principle it should be in the highest interest FDIC insured account you can find. I saw a 2% CD in my first search, but there may be better rates out there.

If my plans were flexible (I wanted to buy a house, but didn't care if it took a few more years) I would put in something like a total market index to get better returns. Even if it has to ride through a correction, that should beat 2% over 5+ years.

[Mighty-Dollar]

maybe a year.  What's the best way to make the most of this money, at lowest risk?

If you want no risk then a CD is the only way to go.
If you want to take some risk then I'd go maybe 30% in a total stock market index fund and 70% in a total bond market index fund. Or take some of that money an put it in a CD.

[VoteCthulu]

Be careful with bond funds right now, many of them are losing principal due to increasing rates (which is good for them long term, but bad short term).

[TomJoad]

Wow, thank you for all of the advice.  I've read all of the posts but just found the forum section.   I plan of making my decision soon.