On 16 mar, 06:40, "W. Wells" <o...[at]nc.rr.com> wrote:
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In my opinion you need five years in other-than-cash: money market,
bonds, bond funds, etc. This is conservative in my opinion and may
carry a high opportunity cost, especially if you are more than five
years from retirement. The opportunity cost is the money you didn{t
make because your money was not invested in equities.

Frank

On Mar 16, 12:40 pm, "W. Wells" <o...[at]nc.rr.com> wrote:
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Unless you are very bearish about bonds, that seems excessive.

In a normal interest rate environment, the yield on short term (sub 5
year to maturity) bonds exceeds that of short term interest rates.

Say you had $100k in short term cash, and estimated your immediate
cash needs (for the next 12 months) to be $33k. You could invest the
other $67k in short term bond funds, or in a ladder of bonds, and pick
up 1-2% per annum in additional yield.

Right now that wouldn't work (inversely sloped yield curve) but it
does, normally.

That thought entered my mind also. Thanks

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote in message
news:_hBKh.128080$_73.15431[at]newsread2.news.pas.earthlink.net...
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The returns of bonds from around 2-years to 5-years in
maturity have usually been higher than money market returns,
for one thing.

"W. Wells" <otf70[at]nc.rr.com> wrote
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On Mar 16, 8:40 am, "W. Wells" <o...[at]nc.rr.com> wrote:
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IMO, the market takes more than 3 years to recover from moderate drops
(2000-2002 for example), so having more than 3 years cash in
conservative instruments is a better practice to me.

But I am also 20-35 years away from needing to use this strategy (I
think 7 years income in cash type investments is better).

If I have three years cash income in reserve why would I need bonds for the
down markets in retirement?