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Asset allocation for mutual fund. I want to open up a fund(s) to save for a new vehicle. I estimate that I ?
Question : Asset allocation for mutual fund. I want to open up a fund(s) to save for a new vehicle. I estimate that I ?
will buy a new vehicle in about 4 years. I will make monthly payments to this fund for dollar cost averaging purposes. Please make suggestions for asset allocation with percentages. For example 20% stocks, 60% short term bonds, 20% money market. Or possibly all money market, or all bonds. I am just looking for suggestions. Thanks in advance.
asset allocation
Best answer:
Answer by JohnGalt
All money market would be my choice. Investing ni STocks and bonds is for longer term money.
I agree with the previous answer that four years is not a meaningful investment horizon. You should use a combination of CDs and money market fund and save up enough for down payment on your new car. If you have sufficient down payment, you can back it up with a new car loan, which you can get at reasonable rates with a good credit history.
So, keep that separate from your long-term investments, particularly in accounts such as Roth IRA, where you can build a diversified portfolio investing in all asset classes – stocks, bonds, commodities, etc.