Introduction to How to Invest for Short-Term Goals

Perhaps you’re comfortable choosing investments for goals that are 15 or 20 years away—say, for your retirement or for your toddler’s education. After all, 20 years is a long time, and you can handle the volatility that comes with investing if you know you don’t need the money any time soon.

But you’re probably less comfortable choosing investments for goals that are within spitting distance. Like buying that bigger home in three years. Or sending your teen to college in two years. Or taking a European jaunt in four years.

Here are some options for how to invest for short-term goals, along with the pros and cons of each.