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  1. #1

    Emergency Funds (Bucket) ????

    I did search for better way to invest/manage the Emergency Fund (bucket) of portfolio. I find Regular Savings Account, Cds, Short Term Bond Fund , Intermediate-Term Bond Fund, Money Market etc to fit into this bucket.

    With the prospect of rising interest rates, any short or mid duration bond funds that may lose 2 - 5% of principle by about Jan 1 2017.

    What is the best way to configure the emergency fund (Bucket) in this situation?
    Thanks for sharing.

  2. #2
    Who really knows what bonds will do, or more specifically when and how quickly? 2-3 years ago the "experts" were calling for an imminent decrease in bond values, but here we are and it hasn't happened. Of course they will decrease at some point as the Fed raise rates, but no one knows for sure when they will do this (it appears that it will be sometime this year, perhaps as early as June, but it's not a sure thing, or especially by how much). I suspect that they will raise rates VERY gradually, so in theory the impact on bonds will be gradual as well.
    With all that said, I would still still stick with short to intermediate term funds for bonds, but I don't think I'd consider this an "emergency fund", IE possible need for the money within 1-2 years. I would keep ER money in CD's and money markets, unless of course you have a stable value fund available to you that pays a higher interest rate than the money market, CD's. Look for CD's that have better rates and lower penalties (of course) in case you want to get the money out for that ER. Perhaps some other contributers can give some input as to who is offering those CD terms. I'm using ALLY, they had excellent rates and penalty terms when I put money in 2-3 years ago, but you may find better now. And you may want to "ladder" those CD's, IE, putting money in for various time periods, IE, 1 year, 2 years, etc.

  3. #3
    What are the short to intermediate term funds/ETF work for you?

  4. #4
    Sorry, but I'm not sure what your question is.

  5. #5
    In your reply, you mentioned about,
    Short term funds
    Intermediate term funds
    Stable value fund
    Do you know any of the FUNDS/ETFs fall in above category?
    How did those funds/ETF perform in your portfolios?
    Thanks for sharing.


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