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Comment by lotsofpulp | Hacker News Reader

If you need some amount of money sometime within the next ~5 years, then parking it in a FDIC insured savings account is the most appropriate option commensurate with the amount of risk tolerable (i.e. none), in my opinion.

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Why not invest in <5 year US Treasuries?

Approximately same security, higher yield than savings accounts. (Asuming you're not going through the gymnastics / risk to balance across reward savings accounts)

You can, just more work. If you're saving for a smaller downpayment, it might not be worth the effort for 50 basis points.

Nothing you can't do in an afternoon of work if you're holding them until maturity.

More work? Simply park it in one of (yields as of Dec '18):

* VMRXX - Vanguard Prime Money Market Fund, ~2.4% yield, fully taxable

* VUSXX - Vanguard Treasury Money Market Fund, ~2.2% yield, no state tax

* VMSXX - Vanguard Municipal Money Market Fund, ~1.6% yield, no federal tax

* VCTXX - Vanguard California Municipal Money Market Fund, ~1.5% yield, no federal or California tax

I know, but I like to keep it simple and stupid for most people who aren't interested in the field. Marcus and others offer 2.25%. On a $100k downpayment, we're only talking about hundreds of dollars.

At Fidelity at least, you can auto-roll direct buys from the Treasury. So it's pretty set and forget.

This is the big discussion right now, it definitely seems like some sort of downturn/correction is coming within the next 18 months. We'd like to buy within the next 5 years but are willing to stretch it out to a max of 7 (we've decided that no matter where we go we'll end up in a high CoL area). So for now we're keeping a chunk of our savings in the market and will keep an eye on asset allocation and continuing to re-evaluate our risk tolerance and the market.

Unless you have major insider information, the market will usually correct before you can cash out. If you have the cash available, you can jump on a good deal the second it becomes available, especially in a downturn when others are having trouble coming up with the cash. It all depends on how risk-free you want to be of course, good luck!

What about a 401k? On my Fidelity account I can choose where the money is allocated. Should I shift it into something more stable (money market fund)?

If you're young and you still have 10, 20, 30 years before retirement, then I would say be aggressive and go with some total market index funds like FSTVX. But that's because I believe the US government will always keep printing money to keep asset prices high in the long run.

It’s too bad there aren’t any good investment vehicles that track particular residential real estate markets at least reasonably well.

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