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re: Investing Emergency Fund?
Posted on 1/4/17 at 12:33 pm to Elusiveporpi
Posted on 1/4/17 at 12:33 pm to Elusiveporpi
quote:
So I am wanting to invest my emergency fund (15K) in a low risk situation, but have it instantly accessible. My first thought is Blue Chip stocks. is this a good idea? bad idea?
It is a bad idea.
Blue chip stocks aren't low risk for an emergency fund...they are low risk compared to small cap or penny stocks, but if the stock market crashes the blue chips are going to plummet along with everything else. To put this in perspective, go take a look at the 30 stocks that comprise the Dow Jones Industrial Average....those companies are as 'blue chip' as it gets, and when the market went to shite in 2008 the Dow went down over 50%. And since a market crash usually results in a lot of jobs being lost, that is about the worst possible time for your emergency fund to take a nosedive.
Just find as high an interest rate as you can on a good savings account or CD, stick your emergency fund in there and don't touch it unless you encounter an emergency. It's not an investment....it's an insurance policy.
This post was edited on 1/4/17 at 12:40 pm
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