Emergency funds can be used if the investor understands that he will get his money in a very short time. Some times it may case that the withdrawal of money from the bank is not possible within 2-3 days due to a technical error or some other reasons or if it is not possible to transfer it quickly due to the bank being closed, then the investor can use his emergency funds. The investor knows that he will definitely get the money and after getting that money, he will be able to refill his emergency fund. In this situation, investing in an emergency fund is definitely a good idea. It is not always possible to find a dip, but if someone finds a dip for a short time and in that case there is a certainty of getting his fund, then investing in an emergency fund can definitely be profitable. It is okay to not invest in an emergency fund if it is too late to receive that money.
Investing with emergency funds is never the right way to invest. Investing with emergency funds can be like gambling. Because by investing with emergency funds, you are putting your holdings or investments at risk. Due to which your holdings or investments may have to be sold. In addition to the emergency fund, you need to create some funds that can be accessed very easily. For example, you have a reserve fund or backup fund that you have kept only during a downturn or to buy DIPs. It should be kept in a place that you can access very easily. Emergency funds should be kept only for investing in emergencies. It is never right to invest with emergency funds