A problem is that declines in the stock market are correlated with mass unemployment, and there’s a significant risk you’ll lose more than $6,000 at the same time you become unemployed. This would leave you with an emergency fund of less than $20,000. If you were depending on that $20,000 to survive a period of unemployment, then you’re going to have a problem.
This was actually taken into account in the article I linked to. Using their definition of a moderate-risk portfolio, looking at historical data it is unlikely that the account would drop below $20,000.
A problem is that declines in the stock market are correlated with mass unemployment, and there’s a significant risk you’ll lose more than $6,000 at the same time you become unemployed. This would leave you with an emergency fund of less than $20,000. If you were depending on that $20,000 to survive a period of unemployment, then you’re going to have a problem.
This was actually taken into account in the article I linked to. Using their definition of a moderate-risk portfolio, looking at historical data it is unlikely that the account would drop below $20,000.