Here’s a model portfolio for people investing money they’ll use to buy a house in the next few years:
Stocks: 0 per cent
Bonds: 0 per cent
Cash: 100 per cent
You can’t afford to take any risks with money you’ll need in the near to medium term for a major expense like buying a home. Save it, don’t invest it. Use a high interest savings account that is covered by Canada Deposit Insurance Corp. or credit union deposit insurance, and forget about stocks and bonds. You’ll make only a token rate of return on this money, but the risk of loss is pretty much nil.