Investing involves the risk of your assets declining in value, so when your savings goal is in sight the last thing you want is your investments to suddenly dip and you find yourself $20K short of your deposit. The investment term for this risk is sequencing risk. Sequencing risk refers to the sequence in which returns (both positive and negative) happen.
We advocate for investors with a specific goal in mind to keep note of where they are on the path to that goal and to pay attention to that timeframe. All of the InvestSMART portfolios have a minimum recommended investment timeframe. These timeframes relate directly to the split between risky/growth assets and defensive assets in the portfolio. The longer the timeframe the higher the exposure to growth assets. These growth assets tend to be the most volatile.
So, as your investment timeframe shrinks because your balance is growing, investors may wish to rebalance their portfolio to a lower risk profile. With InvestSMART you can do this easily online. Our cash securities portfolio has the shortest timeframe of 1+ years.
If you are within 12 months of buying a house, that deposit should not be exposed to financial markets.