We are planning to get our kitchen remodeled, so we've allowed a big balance to accumulate in our bank account. We're not making very rapid progress on soliciting quotes on the remodel, due to our own procrastination, and it's hard to say how soon the whole thing will actually happen. What is the most sensible thing to do with a pile of money like this when we may need to spend it after some indeterminate time, which may be 3 months or 12 months? We're in the US. If we put it in an index fund, it seems like it could be a situation where we lose either way: if the S&P goes up, we pay short-term capital gains, but if it goes down, we also lose money.
We don't really care about variability, because we have other funds we could liquidate if needed in order to pay for the remodel. (It would just be a hassle and trigger long-term capital gains taxes). For the sake of this question, let's say that we just want to maximize our expected return.