<prompt> Human: As opposed to buying a bunch of bonds or putting money in a fund or something?  <response>: I think you should be invested. First, 5 years is a long time and a lot can change. What you plan as 5 years now could end up being 7 to 10 years, which is way to long to be out of the market. Second, if the money is for a house, you need to think of both the housing markets and the stock market at the same time, as there is some correlation between the two. Consider your risk of the market continues to do great discounting the last week. You could easily find yourself priced out of the houses you want because your money sat there earning 1. And the corollary is probably also true. I cant imagine a situation where the stock market tanks, yet housing goes way up. So even if you loose some money in the market, things net out because housing prices would remain flat or down. Really, In my view, the only way you end up better off with a savings account or bonds is if you are betting against both the stock market and the housing market. 