Date: Mon, 3 Oct 2005 15:26:24 CST
From: "Elle" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Emergency Fund and Asset Allocation
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	=+Fme

"orpheusNY"  wrote
> We're in the middle of rebalancing our portfolio, and I'm wondering how
> other people think about this.
>
> Since we live in an expensive are of the country, our emergency fund (12
> months' expenses worth) represents a little more than a third of our
> non-retirement investment portfolio.

To clarify the situation:
What is the purpose of the non-retirement investment portfolio?

If you plan to hold this "non-retirement portfolio" for more than 20 years,
then I'd calculate what fraction the emergency fund is of your total
portfolio (retirement or otherwise). That might help in your understanding
of the situation.

Either way, I would disreguard the "emergency fund" in my portfolio
allocation planning, because portfolio allocation tools are designed around
optimizing returns for a certain period of time. But this emergency fund's
lifetime is unknown.