“Gambling” with your emergency fund

August 17, 2007

I wouldn’t suggest anyone do this. You need an emergency fund and you shouldn’t touch it unless it’s a true emergency. A pair of designer shoes on sale is NOT an emergency.

Easier said than done.

I’ve been putting money in the market these past few weeks.

Given the plunge these past 2 days and the great recovery yesterday, I couldn’t resist myself.

I almost depleted my savings (At least I still have my CDs which I could access for a lower value) and bought more stocks today.

I’m the proud owner of USB (US Bancorp) and WFC (Wells Fargo). I thought about BAC (Bank of America), but I just dislike their service so much, that couldn’t make myself buying their stocks.

Was it stupid to buy more stocks using my emergency fund? Yes. But unlike buying a new pair of designer shoes, this is something I hope I won’t regret.

I trully think the market is overreacting. If you look at the volume of stocks traded yesterday and today, you can see a LOT of people jumping in the market as well.

Knowing how impulsive I am (which is bad for investing), the only way I’ll be able to build up my emergency funds will be through a CD ladder. That’s the only way I’ll be able to leave some money and not touch it.

Another note: DO NOT TAKE PF BLOGGER’S ADVICE WHEN INVESTING.

Several are selling their stocks. Others, like me, are jumping in. Don’t take any of these advices blindly. You all have different purposes and are in different stages of life. There’s also different levels of risk tollerance.

So always make your own decisions. As much as you respect them, don’t blindly follow any PF blogger’s actions.

Posted in Finances, Investment