Hypothetical - generally if you have a need for a large sum of cash in ~3-5 years, it’s best to keep it in a HYSA. If longer time horizon, put it in the market so it can grow. (Assuming regular contributions/DCA in both scenarios) If you go the market direction, at what point do you pull it out of the market and back into an HYSA ahead of the purchase? 1 year out? 2 years out? Day of the sale?

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If you would keep cash for expenses 3-5 years out, it seems logical to sell investments and hold in cash 3-5 years before the cash is needed

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Sounds like you answered your own question

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You should go in a money market fund

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I’d start thinking about it 3 years out. If market is way down for some odd reason (like Covid) then I’d wait and monitor and pull out at the first bounce back.

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Usually 12 to 24 months, leave in liquid or near liquid investments (HYSA, Bonds, etc). If you need in 2 to 5 years, equities tend to perform better (especially if it’s not a strict timeline and you can extend by a year or two if necessary).

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Thanks for all the responses! I’m realizing there is an opportunity to clarify my question further but just to validate what I’m seeing - let’s say I need a large down payment in 7 years. I would start saving via securities for the first 5 years, then ~2 years out evaluate market to pull into cash, or if down, leave and wait for a rally.

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You can leave the money in the market for years 6 and 7, just start pushing your short term cash towards HYSA or bonds at that point. If you want to start harvesting gains / losses in years 6 and 7 both to lock in your gains but also for tax purposes, that might be smart too.

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I'd say at least 2 years, depending on the amount maybe 3.

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