| This sounds true if you only optimize for (hedge against) one risk only - stock market crash. To me, an emergency fund is a hedge against various different risks like these (I am guilty of not being prepared for all of them): 1. A pandemic. For this I was ready even before we thought it's indeed possible - I have funds in several different banks (debit cards) that allow me to not have to visit a bank physically for several years (even if some of the cards expire in the meantime, or one bank suddenly goes bust) 2. AI glitch, identity theft, a bank holiday (this happened to me actually some years ago) that blocks you from accessing banks (and investment brokers if you have nowhere to withdraw your funds) for several weeks/months - for that you hold paper cash, physical gold and cryptocurrencies stashed at different physical locations. 3. Natural disasters - again some combination of diversified physical and virtual funds 4. Legal trouble - yes, even if you are not guilty you could get your funds blocked. I presume you are from the US, hence the purple goggles ;) (I hope I'm not offending you) |