#8
Investing Money You Need Soon
S&P range: -37% to +54% in a year. Need money in <2 years? HYSA. >5 years? Stocks.
Investing short-term cash in stocks risks locking in losses during a downturn, since annual returns range from -37% to +54%, whereas money needed within 1-2 years earns a safe 5% APY in a high-yield savings account (2026 rates). This outperforms #8 (Investing Money You Need Soon) by emphasizing liquidity tradeoffs. Rule: stocks for 5+ years, bonds for 3-5, cash for 1-2. Beginners tempted to chase stock gains often sell at the worst time when needing cash.
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