Using a Roth IRA vs Money Market to save for next REI purchase

[Ryan Irwin]

Hello BP community!  

Going back and forth on the best way to put/save cash for my next REI. This might be an obvious answer but looking for some reassurance to see if I'm on the right track. When the mutual fund/stock market was good, I was putting money into my Roth IRA with the knowledge that I could withdraw without penalty, taking advantage of the market rates. However, now that things have shifted, it seems that even though it's good time to buy funds when the market is low, I feel like I can get more out of having cash on hand in the short term. Additionally, hope to make at least a couple investments before the market shifts back into recovery mode, so wouldn't have favorable returns on the Roth in that time period.

Bottom line is I think I can get more of a return if I put cash in a money market at the bank (even though there's little interest accrued) for my next RE purchase versus buying low in my Roth and seeing it climb down the road (esp. since I anticipate that market will continue to drop). I'm confident that in the long term, a REI will give more of a return anyway than the Roth would (esp. with the tax deductions and appreciation factored in). In fact, kind of makes me think I should stop contributing to it period.

Hopefully that made sense and would love to get some feedback?  

[Chris Davidson]

@Ryan Irwin it will on depend on your timeframe. If you anticipate the market to continue to drop you will loose money if your withdrawals will happen before the rebound. However if you expect the market to rebound before your withdrawal than it could be a nice return. However you are bringing on more risk, if you are looking at less than 6 months I would just save the money in a money market or savings acct, that way you still have all the funds you put in when you go to withdrawal and not less.