When to switch?

[natetheb]

I understand no one has a crystal ball and cannot predict what the market will do. Perhaps this is a risked based question, but I am unsure of the best course of action.



We have been saving up to buy land (10+ acres) and build our final family/retirement home (kids are still young) on said land. I believe we are about a year away from having all our finances in order and will be ready to purchase land during the summer/fall of 2024. We are looking to spend between $200k-$300k on land. Our current home, with a tax appraisal value of about $250k, will be paid off NLT this September. We plan on using the cash we have saved up and a HELOC, since current HELOC rates are better than raw land loan rates. The question is what should we do with our saved up money from now until when we are ready to purchase the land in approximately 14 months?


Our land savings is in a taxable account with the following:
MFA - $3400 (paper loss of $4k)
VEMAX - $4850 (+$166)
VFIAX - $25k (+$9k)
VTIAX - $5k (+$293)
VWITX - $37k (paper loss of $1560)


Here are some options I have come up with, but I would like your opinions:
1) Move the entire holdings to VMRXX

2) Move everything except VWITX into VMRXX
3) Move everything except VFIAX into VMRXX
4) Move everything except VFIAX and VWITX into VMRXX
5) Do nothing
6) Do something else



What are your recommendations if you were in my shoes?

 

[38Chevy454]

With a 14 month timeframe and definite plans for the money, I would put it all into a money market type account and get the ~4.5% interest they are paying now; which may rise some if rates go up a bit later this year. Or a 12 month CD. Conservative safe and positive return on the money, that you know will be there when you need it. I don't do Vanguard so no idea what those various funds you listed are.

too much risk to have in the market, if a recession hits or gets stronger, equities could go down. You don't want that for the short term money.

 

[Gumby]

Buy one year treasuries.

 

[Still Learning]

Agree with both responses above. We shifted a lot into Fed MM and CDs last year and sleep well at night. Still have 6 smaller stock/bond funds that we are tracking for better times.

 

[OldShooter]

With a 14 month timeframe and definite plans for the money, I would put it all into a money market type account and get the ~4.5% interest they are paying now; which may rise some if rates go up a bit later this year. Or a 12 month CD. Conservative safe and positive return on the money, that you know will be there when you need it. I don't do Vanguard so no idea what those various funds you listed are.

too much risk to have in the market, if a recession hits or gets stronger, equities could go down. You don't want that for the short term money.

This. We are just moving into a new lake house. When we committed, 2-3 years ago I immediately liquidated enough equities to leave us with near-cash enough to pay for the house.

I did use a $250K HELOC towards the end of last year as drawing IRA money was running our marginal tax rate up. We drew on the IRAs to pay off the HELOC on January 3, smoothing out our income a little bit.