EF
I totally agree that an emergency fund should be kept in very liquid vehicles -- cash, CDs, and the like. Having an emergency fund in stocks or even funds is risky because by the very nature of the fund, it is something that you may need to tap into at any time -- and that time may not coincide with an opportune time in the market. Having standing stop loss orders may be a way to fight this, but it seems like a good way to have your money churn a bit.
Also, there were some questions as to why you would have a substantial sum, say $15,000 in an EF. Well, it all amounts to your personal expenses and tolerance for risk. If your expenses for 6 months total 15k, it would certainly be wise to have all of that available in your EF -- say, if you lost your job and had to cover your expenses for a duration of time.
Personally, I keep a decent amount in cash and more in staggered 1 year CDs, so every month, I have a CD that matures that I could tap into should I need it, if not, it just renews to another 1 year term. It also helps flatten spikes and dips in near term interest rates.
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