Where would you stash short-term holdings (<1 year) for potentially planned expenses?
Assume it's a taxable account and you're in a state with high income tax (which applies to capital gains / dividends) like CA.
I've been stashing things short term (1-3 months) in SGOV when I've sold stock and needed to hold back for cap gains estimated tax payments. Figure it's a fine way to get a 3.5-4% annualized yield with basically zero risk. Better than a HYSA because the dividends are shielded from CA income tax.
But I'm looking at next summer being the optimal time to buy a house. And I'll have a decent chunk of vesting RSUs over the next 4 quarters (which if sold at vest aren't going to have material cap gains) between now and then. I've been thinking of just rolling those into a safe yielding investment until I decide what I'm going to do house-wise. It's more about recession protection, because if I weren't worried about that, I'd just drop it in VTI.
SGOV is easy, gives that 3.5-4% yield, is safe, and at least avoids the CA income tax (possibly 12.3% this year). I see other vehicles, like JAAA/JBBB/CLOZ, which have higher yields (5.34%6.95%/7.2%, respectively). But I don't know what the risk profile is, and I know they're not tax-advantaged like SGOV. Will the principal value markedly decline in a recession? I don't really know, but that would make them no better than VTI. I have some risk tolerance, but it's like the 5-10% level, not the 50% level.
Thoughts? Is there anything better than SGOV in this situation?
