Q:

Hi Scott,

I just received a lump sum of $100,000.  As you know, we are thinking of purchasing a home in a couple of years, and I was thinking of using this as part of the down payment.  In the meantime, I was thinking about investing the money for it to grow along with the rest of my portfolio.  Should we do that?

A:

Hi Client,

Great question.  In your case, we suggest you park the money where it can grow, but is also safe from the short-term volatility and risks of the stock market.   A good option for funds you will need in the next few years would be a high-yield FDIC insured savings account or a high-quality money market fund.  As a rule of thumb, any money you need in the short term should be invested in corresponding short term investment vehicles.  

All questions are real questions, but for confidentiality reasons are re-written.  They are not intended as individualized advice.