As the captial market strategist, money managers, and Fed watchers battle over whether higher than average inflation is in a secular uptrend (i.e. longer term) or is transitory and heading back to 2% or less, it is important to keep in mind a few critical things as it relates to managing an investment portfolio. First, investing by its very nature, is a long term endevor. Putting money into stocks or any long term investments that you plan to spend over the next few years in foolish. Cash needs should be sourced from short term money markets and other liquid instruments that will not fluctuate in value. At Rich Wealth Management, we stress that every client should have an emergency fund equal to 3 to 6 months of fixed and variable living expenses (3 months if you have two income and 6 months if you rely on one). Beyond that, as client's approach the launch pad of their retirement, we further like to see clients with 18-24 months of livinging expenses on the sidelines in cash/money markets and the like. Why? We don't want to have to liquidate investments at a loss to pay bills and cover living expenses if the timing of retirment coincides with a bear market (see 2000-2002, 2008-2009, etc.). Although there are no guarantees, many market declines tend to rebound after 24 months, hence we can reasonably expect to have a better chance of riding out this downturn if you're unfortunate enough to be enter retirement during dramatic decline. The reality is that an "investment" should have a bare minimum of 5 year time horizon to be considered as such. In practice, we like to look 10 years and beyond, when it involves stocks and longer term maturity securiites.