From: timbo 
Newsgroups: misc.invest.financial-plan
Subject: Re: Emergency Fund and Asset Allocation
Date: 4 Oct 2005 09:10:01 GMT
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orpheusNY wrote:


> My question is this: when allocating the remaining 2/3 of our
> non-retirement portfolio should we consider the emergency funds as
> fixed-income investments?  "Off the table?" Or perhaps half and half,
> since a 1 year emergency fund is on the conservative side?

The emergency fund is analogous to training wheels for the financial
illiterate. At some point, all cash equivalents have to be dealt with in
terms of a risk-free portfolio.  IOW, the risk-free portfolio is the core
investment and is the basis for departure into the variance world.