The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: senorpanqueque on March 13, 2015, 09:03:51 PM
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The wife and I are finally starting to put money away for a down payment. Time horizon is 3-5 years barring anything crazy happening. I've done a bit of research but haven't found much on what is recommended for placement of funds. Ideally, it would be nice to make a little interest on the money to help out along the way, but I understand that this is different from my retirement savings and shouldn't be invested in the same way.
Any tips/links/personal experiences would be much appreciated.
Just for a bit of extra info, we are using our TFSAs to save for retirement, and aren't using the RRSP room until incomes are higher and the TFSAs are maxed.
Thanks!
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I am in a similar situation, but with 9 to 12 months and very curious as well.
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http://www.mrmoneymustache.com/2011/06/07/where-should-i-invest-my-short-term-stash/
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for 3-5 years, 3 year CDs could be good.
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http://www.mrmoneymustache.com/2011/06/07/where-should-i-invest-my-short-term-stash/
Just found VTMFX (Vanguard Tax-Managed Balanced Fund Admiral Shares) in a bogleheads post as an alternative to VBINX if stashing funds in a taxable account. They seem to perform similarly.
I am also trying to find the best way to stash and grow funds that could be used at any time (in a taxable account). I was initially considering a more conservative mix of VTSAX, VTIAX, and VWITX (Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares) as a possible solution. However, VTMFX seems tempting given my current funds level since the admiral shares expense ratio is fairly decent at 0.12% with a $10k minimum. VWIUX has the same expense ratio but the minimum is $50k, so we would be stuck with VWITX at 0.23% (with $3k min) for awhile.
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If you want to be really secure you could each open a Tangerine (used to be ING Direct) high interest savings or TFSA account. They also offer GICs and a few different low MER funds. If you use my referral code we each get $50. The code is 13987324S1.
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CD's are good.
I personally put about half of ours in a CD, and put the other half and mathematically calculated a minimum variance portfolio. This takes some good math skills (correlations, covariance, etc), but led me to a portfolio that yielded ~2% and had very little market risk.
I eventually moved this into a more traditional portfolio, but that was just because we delayed a house purchase for another indefinite period.