Multi year Vacation Fund. Invest it or don’t.

[cfardwell]

Each pay check I set aside part of my income towards a future vacation goal. The goal is to accumulate 10,000 in 5 years. My question is, should that money be invest in the stock market? (I am already familiar with the market and have several funds.)

[disneysteve]

No. Money you need in 5 years should not be in the market. I would use a high interest savings account and maybe some CDs.

[Thrif-t]

Of course Steve is correct!

But I'm thinking if it were me and it's a vacation fund, I might chance putting it in the market and keeping a close eye on it. But I don't know how much of a gambler you are?

For me I'd either not be able to take my vacation in the time I wanted or would have to downsize my plans if I suffered a loss. Would you be comfortable suffering any losses with this money? If not don't put it in the market

[kork13]

Me personally, with money I'm intending to use at some point in the next 5 years (but not within the next year or so), I'd most likely spread it around. Some in my savings account for security, and some in my taxable investments (VWITX especially). But I use my taxable investments as a sort of slush fund for anything that isn't isn't a near-term need (>1 year) but may be needed before my kids go to college (15+ yrs). I often find that I would rather cash-flow some large expenses, or take it from short-term savings, than pull out cash from those taxable investments, which only works to my benefit. Probably not the best option for everyone, but it works for us. The more appropriate answer is probably to just keep it in savings, CDs, or the like.

[msomnipotent]

I might be tempted to buy some stocks, but I would be picky. We are at the tail end of a bull market. I'm more inclined to try to get the bonuses for opening savings accounts. I'm not the type of person that can decide I want to go to New Zealand and then settle for Wisconsin if my stock picks tank.

[disneysteve]

I'm curious what your $10,000 vacation is going to be.

[PierceFerdy]

Like Steve said, that kind of money over that timeframe probably should be thrown into stocks. This coming from someone who is currently weighing up his possible short-term investment options. As far as I can see that's hardly enough time to ride out the highs - and lows - of a rather volatile market. Chuck it into a term / time deposit or something similar. At least that way your return is guaranteed and it'll be earning you more than it is now. Your mileage may vary, of course.

[Nutria]

No. Money you need in 5 years should not be in the market. I would use a high interest savings account and maybe some CDs.

This.

Put your money in an Ally online savings account, and then start buying 12 month CDs (the idea being that if rates keep going up you'll always have one coming due soon to take advantage of the new rates).

[LivingAlmostLarge]

invest it. If you lose money go on vacation in 6 years