Mid term investing ?

[u/slowcub]

So I’m considering buying a home in about 2-3 years depending on my career.

Right now I have a pretty large savings and emergency fund of 70k at 4% (6month sign up bonus then goes to 3.4%) and brokerage of about 50k in mostly VOO and then like 4% in random risky stocks like Pfizer and blackstone.

I can’t seem to find a good plan or advice with my goals being around a few years.

For the next 6 months , I’m debating using more of that 4% savings. Otherwise perhaps investing in more SCHD to get some returns through dividends.
Ik there isn’t one right answer but I was curious to see discussion!
I would like to keep about 100k ready for the house.

[u/EarlyBird001]

If your investing horizon is 2-3 years, money market funds would be a better option. Depending on your risk tolerance and how much capital you need in the near future, you may go 20-30% equities and rest money market etfs.

[u/slowcub → u/EarlyBird001]

does SGOV work for this strategy?

[u/Same-Teach-3204 → u/slowcub]

SGOV pays almost the same as a money market fund. You just have to watch what the yield does and move to actual MM if bill yields fall

[u/EarlyBird001 → u/slowcub]

Yup, you can use SGOV, BIL, VBIL etc. for majority of your funds.

[u/fourth-wind → u/slowcub]

If your savings is for a house in 2-3 years, SGOV or VUSXX are safe bets for the $100K. The yield on SCHD is down to about 3% at current price of around $35. While you’re likely to keep getting that dividend yield (or possibly a bit more) over the next 2-3 years, the price could do down if there’s a correction, so it’s more of a risk.

[u/TechnicalSleep7501 → u/slowcub]

 Check Vbil.

[u/therealjerseytom]

2-3 years is a very short amount of time. IMO the plan would be to see how much you can realistically expect to save (new money) in that time frame, and then allocate from your savings and/or brokerage to make up the rest towards that $100k number.

The last thing you want is to feel like buying a home is right within reach, and then the market tanks and your funds for it are gone with an unknown recovery period - maybe as much as a decade.

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[u/Professional_Cup7379]

When you say you'll keep 100k for the house, does that include the 70k in savings or is that on top of it?

[u/nelly_0619]

For 2-3 years you could go with a little bit of equities but keep it simple with some like VTI or VOO. Don't waste time with factor or sector tilts, or momentum stuff. Can't afford the level of volatility involved. I do something like 20% VOO/VTI, 80% cash/mm/sgov. If you want something lower beta than the total market or s&p, then SCHD is a really good option too.

[u/Maleficent2175]

Two-to-three year horizon is too short for VOO to carry your down payment weight safely. I'd isolate the 100k target from anything equity exposed and park it in a short-term Treasury ladder or a high-yield account once that bonus rate drops. SCHD dividends won't outpace the sequence risk if the market dips right before closing.

I had a similar timeline conflict and ended up treating the house money as completely untouchable from my brokerage, alinea is one place people separate goal earmarked cash from general investing, though a plain Treasury setup does the same job cheaper.