Where to put savings you'll need in the next 5 years, according to financial experts

It's been a as investors have digested news of the installation and pause of new tariff policies, ebbing and flowing and between President Donald Trump and Federal Reserve Chairman Jerome Powell.

As of the market close on Monday, the S&P 500 was down about 10% from its February high.

Amid the recent bouts of market turbulence, market experts have been clear in their message to younger, long-term investors: .

The rationale is simple. If you're decades away from a goal such as retirement, your portfolio has plenty of time to recover from short-term setbacks. Given the of the stock market, downturns — including ones far steeper than the current one — have been excellent times to buy stocks.

But if you're saving money for a shorter-term goal, such as buying a car, paying for a wedding or putting a down payment on a house, the advice becomes more nuanced. You shouldn't be plunking more money into stocks, says Christine Benz, director of personal finance and retirement planning at Morningstar.

If you do, "there's a greater risk that your horizon closes," she says. "And when you go to pull money from your account, you could have ... a meaningful loss."

The horizon Benz is referring to is your "time horizon" — investing lingo for the amount of time between now and when you plan to put your money to use. The longer you can wait until you need the money you're saving, the thinking goes, the more risk you can afford to take with your investments.

If you're saving for a retirement 40 years from now, a 10% or 20% decline in your portfolio is a blip. If you were planning to use that same money for a wedding next week, now you can't pay the DJ.

Here's where investing pros say to put your money if you're saving for a short- or medium-term goal.

Short-term savings

Any money you need in less than two or three years, such as a down payment on a home, doesn't belong in an investment that has a real chance of losing money, says Benz: "Safety is really the watch word."

The safest option for your short-term cash is a high-yield savings account, Benz says. There's no risk of losing money — just that the interest you earn won't keep up with the pace of inflation. You can currently find rates north of 4% on these cash accounts at several lenders, according to Bankrate.

You may be able to earn a slightly higher return with a similar risk profile from a money market or short-term — especially one that holds Treasurys, Benz says.

Once you pick a savings instrument you like, stick with it rather than trying to find a mix of investments. Even better if you choose something that doesn't require you to lock your money up for a certain period of time, like a certificate of deposit, Benz says.

"The cash piece of your portfolio should be pretty low maintenance," Benz says. "I don't think most investors care to monkey around with CDs and other securities that have maturity dates. I like just a good Treasury or money market fund as a one-stop, all-purpose vehicle for liquid reserves."

Saving for medium-term goals

Maybe you don't have a date for your wedding or enough money for your dream home. But you know you're going to want some money to spend in, say, three to five or maybe even 10 years.

For a less defined goal, Benz suggests a mix of cash, short-term and intermediate-term bonds. Generally, the longer the maturity date on a bond, the higher return it offers investors for taking on additional risk.

Benz recommends holding bonds in diversified, low-cost mutual funds rather than buying individual IOUs.

Depending on how amorphous your time horizon is, some financial pros say you can even introduce stocks into this mix, too. You'll just have to be prepared to adjust your plans if stock prices slide.

As your goals become clearer, you can adjust your portfolio, shifting the asset mix away from stocks and intermediate-term bonds and toward more cash as your deadline approaches.

"As you get closer to your purchase or commitment, in the range of zero to three years, we don't want that money exposed to the volatility of the stock market," says Daniel Honsberger, a certified financial planner in Midlothian, Virginia.

And remember, while it can be tempting to lean into riskier investments to try to boost the value of your assets, it's not worth risking your short-term or medium-term plans, experts say.

"The bottom line is that when you have a goal in mind where you'll need the money within the next year or even few years, you shouldn't be investing — you should be protecting," says Marcus Holzberg, a CFP based in Corte Madera, California.

"Volatility is the price of admission for long-term growth, but it becomes a liability for near-term needs," Holzberg says.

Do you want a new career that's higher-paying, more flexible or fulfilling? Take C온라인카지노사이트's new online course . Expert instructors will teach you strategies to network successfully, revamp your resume and confidently transition into your dream career. Start today and use coupon code EARLYBIRD for an introductory discount of 30% off $67 (+taxes and fees) through May 13, 2025.

Plus, sign up for C온라인카지노사이트 Make It's newsletter to get tips and tricks for success at work, with money and in life.