There is, however, a subtle difference between these shares and those of open end index funds such as the Vanguard Index 500. A rapidly expanding open-end fund has the additional advantage of constantly diluting existing unrealized capital gains over a larger number of shares. The rapid expansion of index fund assets and shares over the last ten years has contributed to their tax efficiency as well as their low portfolio turnover. Q. I've recently been wondering how much cash I should keep available. Standard response is 6 months supply.
Some answers are easy.
The size of your cash reserve depends entirely on how long it would take to replace your job. If you have a special skill you need more of a reserve even when jobs are plentiful because it takes time to match the jobs with the skills. Computer programming is a good example. There are plenty of programming jobs but finding a good place to work that needs particular skills might take several months. Most people have a comfort zone in which they feel secure.