In the Media - Where to put savings you’ll need in the next 5 years, according to financial experts (CNBC)
- Holzberg Wealth Management
- Jun 11
- 4 min read
Updated: Jun 17
Our very own Marcus Holzberg, CFP® was recently featured in an article from CNBC. In it, he discusses optimal savings strategies for short and medium-term financial goals.
Market volatility can lead many investors to question where to put money earmarked for upcoming goals. As Marcus shared with CNBC, "The bottom line is that when you have a goal in mind where you'll need the money within the next year or even few years, you shouldn't be investing – you should be protecting."
This distinction between investing and protecting is crucial to understand. While market downturns can be opportunities for long-term investors, they can be devastating when you need access to your money soon. As he explains further: "Volatility is the price of admission for long-term growth, but it becomes a liability for near-term needs."
The Time Horizon Framework
Understanding your time horizon is the foundation of making informed financial decisions. Here's how we guide clients:
Short-Term Goals (0-3 Years)
Examples: Emergency fund, home down payment, wedding expenses, car purchase.
Our Approach: Prioritize capital preservation over growth.
Where to Put the Money:
High-yield savings accounts
Money market funds/accounts
Short-term Treasury funds
The goal here isn't to maximize returns – it's to ensure your money is there when you need it, with some protection against inflation.
Medium-Term Goals (3-5 Years)
Examples: Home upgrade, sabbatical fund, children's education expenses
Our approach: A balanced mix that adjusts as deadlines approach
Where to Put the Money:
Mostly cash equivalent securities and short-term bonds
Potentially some intermediate-term bonds
Depending on how flexible your time horizon is, you could possibly introduce a cautious stock allocation.
The key is being prepared to adjust your timeline if market conditions don't cooperate.
The 5-Year Rule
Money needed within five years should not be fully exposed to stock market volatility. While stocks have historically recovered from downturns, they don't operate on your personal timeline.
How to Approach Short-Term Savings
Keep it simple: Don't overcomplicate your short-term savings strategy. Choose one primary vehicle and stick with it rather than trying to optimize across multiple products.
Prioritize liquidity: Avoid investments that lock up your money (like CDs) unless you're certain about your timeline.
Plan for the glide path: As you get closer to your goal, gradually shift toward more conservative options. This "glide path" approach reduces sequence-of-return risk.
Build in buffers: Save slightly more than you think you'll need, and plan to reach your savings goal 6-12 months before you actually need the money.
Common Mistakes to Avoid
Chasing yield with near-term money: The extra 1-2% return isn't worth the risk of losing 10-20% when you need access to funds.
Ignoring inflation completely: While protection is priority one, consider accounts that offer some inflation protection.
Using one strategy for all goals: Different time horizons require different approaches, even within the same household.
Changing strategies with market headlines: Consistency in your short-term savings approach is more important than trying to time markets.
When Market Volatility Strikes
During periods of market swings, it's natural to second-guess your approach. Remember:
Short-term volatility is normal and expected
Your near-term money should already be protected from this volatility
This is exactly why we separate short-term and long-term money
The Bottom Line
Smart financial planning isn't about maximizing returns on every dollar – it's about matching your money's purpose with appropriate risk levels. Your short and medium-term savings should be boring, predictable, and there when you need them.
Need help optimizing your savings strategy for different time horizons? Check out the article here in CNBC featuring Marcus Holzberg, CFP®.
If you have questions about your financial plan and working with a financial advisor, check us out. You can schedule a complimentary, no-obligation call with us here!
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About the Author
Holzberg Wealth Management is a family-owned and operated financial planning and investment management firm based in Marin County, CA. As your financial advisors, we serve you as a fiduciary and are fee-only, so we never receive commissions of any kind. We help individuals and families like you in the greater San Francisco Bay Area and virtually nationwide with the financial decision-making process to organize, grow, and protect your assets.
** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions.
