I have about $18k in mutual fund assets that I am planning to use for a down payment on a home within the next 1-2 years. Combined cost basis for the assets in question is +$2,800. Right now the asset allocation is aggressive, with a heavy slant towards stocks.

I'm not going to be contributing to these funds within the above timeframe. I just want to make sure they hold their value.

The way I see it, I can either liquidate the funds now and put them in a savings account, or I can rebalance to a safer investment within the funds, then liquidate closer to the actual closing date.

Are there any advantages or disadvantages to doing one or the other, or does it really not matter?

  • 4
    any time you want to make sure your account holds value, you put it into safer options, such as cash/CDs/MMAs Commented Oct 19, 2013 at 18:46
  • @imsoconfused why not put it as an answer?
    – littleadv
    Commented Oct 20, 2013 at 1:47
  • 1
    @littleadv meh, i'm lazy and it's not an interesting answer. I'd much rather it be marked as a duplicate of this: money.stackexchange.com/questions/7632/… Commented Oct 20, 2013 at 7:37
  • @imsoconfused that is good advice but it doesn't answer the question - I'm going to go to safer investments either way. The question is whether to liquidate now or closer to the closing date. The question is also not a duplicate, it specifically asks when as opposed to what.
    – Jeremy
    Commented Oct 22, 2013 at 16:40
  • When is easy - WHEN do you want a safer investment? THEN you liquidate and move to safer investments. Commented Oct 22, 2013 at 18:28

1 Answer 1


This question is calling for a somewhat subjective answer. What I would recommend is liquidate now, since it is a stock fund and stocks have performed very well this year, no need to be greedy and hope that they do as well in 2014. Since it is not an enormous amount of money, put it in an interest yielding savings account which unfortunately are all sub 1%. But the key here is since we cannot predict the markets, no investment is going to be "safer". You want the 18k to be there when you need it for the down payment. If you invest it in a fund now, you may not be able to get at least 18k at the time you are forcing yourself to liquidate. A good rule for investing is never to have to sell to make a purchase because there is a high probability that you will be selling at a sub-optimal price.

Some savings accounts that have slightly higher yields. http://money.cnn.com/2013/10/01/pf/savings-account-yields/

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