Invest downpayment for a new house?

[AKnogoood]

I’m 28 years old and I live in Canada. I’m planning to buy a $200K house in about 8 to 20 months (in January 2008 or January 2009). I currently have $90K in a cash optimizer account at ETrade.ca (4.15% interest) that I will use as a downpayment. I don’t know much about stocks and that’s why I decided to put my money there.

I recently read the sticky “Investing 101 for Trout” and I was wondering if it would be wise to invest this amount in an Index Fund EFT (some posters suggested Vanguard EFT). I could tolerate a maximum loss of $20K per year on that investment.

So do you guys think it would be a good idea? Or do you have any other suggestions as to what I should do with that $90K? Thanks.

[Big TR]

A CD might get you a better rate than what you are receiving right now.

You do not want to invest in the stock market with these funds unless you are willing to risk losing some principle. You want low risk for the funds you will use in the relative short term.

[NajdorfDefense]

[ QUOTE ]
A CD might get you a better rate than what you are receiving right now.

You do not want to invest in the stock market with these funds unless you are willing to risk losing some principle. You want low risk for the funds you will use in the relative short term.

[/ QUOTE ]

Yeah, you can easily get over 5% short-term guaranteed mm funds. Perhaps put 80% in there and 20% in the stock market as a maximum, then a 20% drop would only take 4% off your return.

[prohornblower]

The answer to your questions are "it depends".

[AKnogoood]

[ QUOTE ]
The answer to your questions are "it depends".

[/ QUOTE ]
Could you please elaborate...

If you need more info please let me know i'll gladly give it to you.

[prohornblower]

1) Are you married?
2) Do you have kids?
3) What is your annual income?
4) What is your household income?
5) What is your net worth?
6) Do you have retirement accounts?
7) If so, how much do you have in them?
8) Do you have debt? Secured, or unsecured? What int. %?
9) What is your 5 year goal? What is your 10 year, etc.?

You know, all that good stuff. I'm sure you don't wish to disclose a bunch of strangers this information, but it would help us advise you.