[MRM]

Then she should buy the house now. It seems like she can't really buy the house she wants and is hoping for her nest egg to appreciate. If that is so, I think the bigger risk is for her not to be in the stock market. If she doesn't need it now but wants to buy a house with it in the future, she needs it to grow and she doesn't have to pull it out ant any specific time so she can let it sit if it isn't growing. Since the Great Depression there's only been one time where the market went down and didn't fully recover in less than five year and that was the oil embargoed 1970s. In other words, anyone who can have a 5 year time horizon should be in stocks. Bonds would be terrible for her. Interest rates are climbing. Bonds will lose value over the next few years. Inflation may pick up. If she doesn't want to park it in cash, three broad based vanguard index funds are the way to go. Especially if inflation returns at all she need exposure to the market or the value of her cash dollars depreciates.

I'll add one slightly more complex option for her consideration: a broad based European index fund. Europe has been in the doldrums and the Dollar is at long-time highs against the GBP and Euro. The double whammy of a Dollar that regresses to the mean and a Europe that begins to grow again could offer a multiplier effect on her investment.

Personally, that is where my family's after tax money is going. It's split between the Dow, and S&P 500 index and an EFT that mimics the NASDQ with about 20% going to a European index fund. All indexes, all low cost. I've been preaching this gospel for years. I wish I had taken my own advice five years earlier.