buying a house in 1mo-3yr, when should I sell bonds?
I'm starting to look for a new house but am taking my time. We want to move to the burbs by the time the kids would enter Kindergarten at the latest, which is three and a half years from now, but would be fine moving sooner too. We are starting to look so early because we are considering a raw land purchase, or a rehab and want to take a year or more to see if we find anything, and then if not start looking at standard existing homes.
As such I might need to make a down payment anytime between one month from now and 3 years from now. I have 3/4 of my current down payment savings in a stable income mutual fund (RPSIX). It's currently at it's highest ever value (no additions in several years, just appreciation) so I'm inclined to cash it out now, but at the same time it's supposed to be 'stable income' (84% bonds, 10% equities, 5% cash) so shouldn't vary that much, but is designed to grow slowly and keep up with inflation I guess. I want to give the money time in the market rather than sit in cash losing value to inflation for up to 3 years.
I'm not as familiar with bond market movements so a little less sure here, if it were mostly stocks I'd cash it out now for sure. It sounds like the fed is taking a break from increasing rates for a little bit (maybe that isn't a sure thing) so the bond market shouldn't be getting hammered any time soon, but I don't really know how bonds as a category perform if a recession hits either.
Answers I'm expecting:
Thanks for any opinions and help.
I'm starting to look for a new house but am taking my time. We want to move to the burbs by the time the kids would enter Kindergarten at the latest, which is three and a half years from now, but would be fine moving sooner too. We are starting to look so early because we are considering a raw land purchase, or a rehab and want to take a year or more to see if we find anything, and then if not start looking at standard existing homes.
As such I might need to make a down payment anytime between one month from now and 3 years from now. I have 3/4 of my current down payment savings in a stable income mutual fund (RPSIX). It's currently at it's highest ever value (no additions in several years, just appreciation) so I'm inclined to cash it out now, but at the same time it's supposed to be 'stable income' (84% bonds, 10% equities, 5% cash) so shouldn't vary that much, but is designed to grow slowly and keep up with inflation I guess. I want to give the money time in the market rather than sit in cash losing value to inflation for up to 3 years.
I'm not as familiar with bond market movements so a little less sure here, if it were mostly stocks I'd cash it out now for sure. It sounds like the fed is taking a break from increasing rates for a little bit (maybe that isn't a sure thing) so the bond market shouldn't be getting hammered any time soon, but I don't really know how bonds as a category perform if a recession hits either.
Answers I'm expecting:
- Just cash it out and stop fretting, you aren't selling low at least.
- There is no right answer, whatever you are comfortable with/depends on your risk tolerance.
- This is market timing so standard market timing response.
Thanks for any opinions and help.
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