Whats the best way to save money for a house?
Investing is a skill. Nobody can predict the stock market except ME. And I say that the market will fluctuate. Mutual funds are usually safer than stocks, but can go down also. Mutual funds have management fees also. What I do is dollar cost average into 3 or 4 no-load, no transaction fee mutual funds. Some bond, some equity funds. I hold them at least 1 year. Whichever fund goes up the most, I sell the shares I invested in it that year, leaving ONLY the gains, and stop dumping money into that fund. Now this fund can never lose you money, because you paid nothing for it. It is nothing but gains. You already took your money out of it that you put into it. I pick another fund and try again with that money, by dollar cost averaging. For stock, Pick a solid, optionable stock that pays a dividend quarterly, and wait till it drops 10%. Make a limit offer to buy 100 shares at 5% below whatever the current price is. If someone accepts it, you are in at 15% below what it was selling for earlier
I would put the money in a money market account or maybe in certificates of deposit. The advantage to these two options is that your money is insured by the government and you are not going to lose it. I put some money in a mutual funds account a while back and what was $2400 is now $1400. With just three years and a volatile stock market I wouldn’t trust my house money in mutual funds right now. You might make more money in dividends, but the stock market might take another nose dive just when you find the perfect house and you could either lose part of your money if you sold the stock, or lose the house if you waited.
