Emergency Savings vs Investment Ratio

fiisch

My first correction in my investing career lasting all of two years, and it's all rather exciting..!

Over the last couple of weeks, I've pinched some money from Emergency Savings (NS&I premium bonds) and added to our small S&S ISA, which has got me thinking (again) about timing the market.  If one is to assume that a correction is unlikely to last more than 2 years, and that you feel you could live with a reduced emergency savings pot for a period e.g.: two months instead of six, and that you're typically below the annual ISA savings allowance, is it not therefore an ingenious idea of mine to top up the ISA, and withdraw once the current dip has levelled out?

(I'm fully expecting to be told this is far from an ingenious idea, but it seems that this is an opportune moment to invest for the relatively short-term with a likely positive outcome).

billy2shots

if you know this ‘correction’ has bottomed and have invested as such then you don’t need to worry about s&s ISAs. All the big players from around the world will be knocking on your door to pay for your expertise/ foresight. 

The flaw in your thinking is that you  may have invested just before markets fall again and they might not recover by the time you need the cash. 

snooloui

The whole point of an emergency fund is that you don’t invest it.

Prism

You might be waiting a couple of years for the current dip to level out. Are you happy to live with a reduced emergency pot during a recession if that happens? Or maybe it won't but its a risk

kinger101

Dipping into an emergency fund to buy equities sounds like a bad idea at the best of times.  On the brink of a global recession, it's reckless.  It's the very time you're most likely to need your emergency fund for actual emergencies, like being made redundant.