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It depends on what you want to do with the money and when you need it:
1) if you don't need it for a long time, the stock market is the best option. Right now, with stocks at rock bottom prices you will be buying stocks on a deep discount, and when the market recovers you will stand to make some very nice returns. Invest in what you know, stable companies that you believe in, or mutual funds/index funds. the S&P 500 is what almost everyone compares themselves to when gauging how well they did. Warren Buffet actually made a bet with a Hedgefund manager that in 10 years, an S&P500 index fund will outperform a hegefund.
http://money.cnn.com/2008/06/04/news/newsmakers/buffett_bet.fortune/index.htm
If you don't know anything put your money into a S&P500 index fund.
2)If you need money within a few years, then a CD (certified Deposit) will be the best bet. with a CD you lock in the interest rate for the term of the CD. so if you got a 3% APY 12 month CD, your money will make 3% in that 12 months no matter what happens in the financial markets.
3) if you need the money any day, then just stick with high interest savings account where you can pull your money any time, but the interest rate is subject to change at any time.
Always make sure you understand the investment vehicle before you invest. you don't want any nasty surprises.
1) if you don't need it for a long time, the stock market is the best option. Right now, with stocks at rock bottom prices you will be buying stocks on a deep discount, and when the market recovers you will stand to make some very nice returns. Invest in what you know, stable companies that you believe in, or mutual funds/index funds. the S&P 500 is what almost everyone compares themselves to when gauging how well they did. Warren Buffet actually made a bet with a Hedgefund manager that in 10 years, an S&P500 index fund will outperform a hegefund.
http://money.cnn.com/2008/06/04/news/newsmakers/buffett_bet.fortune/index.htm
If you don't know anything put your money into a S&P500 index fund.
2)If you need money within a few years, then a CD (certified Deposit) will be the best bet. with a CD you lock in the interest rate for the term of the CD. so if you got a 3% APY 12 month CD, your money will make 3% in that 12 months no matter what happens in the financial markets.
3) if you need the money any day, then just stick with high interest savings account where you can pull your money any time, but the interest rate is subject to change at any time.
Always make sure you understand the investment vehicle before you invest. you don't want any nasty surprises.
I'm no expert, but in this market, invest in t-bills.
Honestly, the best investment for $5k is yourself. Take that money and take some classes or learn a trade--expand your career. An increase in your worth/salary is the best return on investment, in my opinion.
Here is a good article that explains what I mean:
http://www.freemoneyfinance.com/2006/03/maximizing_your.html
Here is a good article that explains what I mean:
http://www.freemoneyfinance.com/2006/03/maximizing_your.html
T-bills are essentially going for 0% interest right now because of the high demand caused by hedge funds flowing to them. You would be better off keeping it in a savings account if you were going to do that.
If you actually wanted to get into the market and play around a bit I would suggest a no load mutual fund with a bond/equity portfolio blend that is allocated towards long term growth. That is if you want to take the safe route. If you want to be a bit risky and the money is something that you could do without I would put it into an online trading account so you have the ability to purchase a few individual stocks with low trading costs.
There are a lot of things to do with $5k and it all depends on if you want to retain your principle (original amount) or have a bit of fun with it and try to make a quick gain with a couple of trades with the possibility of a loss.
If you actually wanted to get into the market and play around a bit I would suggest a no load mutual fund with a bond/equity portfolio blend that is allocated towards long term growth. That is if you want to take the safe route. If you want to be a bit risky and the money is something that you could do without I would put it into an online trading account so you have the ability to purchase a few individual stocks with low trading costs.
There are a lot of things to do with $5k and it all depends on if you want to retain your principle (original amount) or have a bit of fun with it and try to make a quick gain with a couple of trades with the possibility of a loss.
I would suggest Kiva.org for 5% of the money. It is a great way to use your money for true good while retaining your wealth. The other 95% would be to put it in treasury bills or a highest rate CD. Something FDIC secured.
source(s):
http://www.kiva.org/
http://www.nytimes.com/2006/12/10/magazine/10section4.t-6.html?ex=132340680...
http://www.kiva.org/
http://www.nytimes.com/2006/12/10/magazine/10section4.t-6.html?ex=132340680...
With the first $17 buy "The Bogleheads' Guide to Investing". Put the other $4983 in a 4% savings account at Dollar Savings Direct until you have finished reading the book.
The first answer is the best answer.
If you want to buy a CD, go to BankRate dot com. Banks that are in trouble will be offering very high rates. Buy on of those. You don't need to worry about the bank being in trouble because your CD will be insured by the FDIC.
If you want to put in the stock market, be sure you can leave it alone for at least three years. Also, tips are for waiters, don't take any stock tips from anyone. Do your own research use Microsoft for stocks and Morningstar for funds.
If you want to buy a CD, go to BankRate dot com. Banks that are in trouble will be offering very high rates. Buy on of those. You don't need to worry about the bank being in trouble because your CD will be insured by the FDIC.
If you want to put in the stock market, be sure you can leave it alone for at least three years. Also, tips are for waiters, don't take any stock tips from anyone. Do your own research use Microsoft for stocks and Morningstar for funds.
In a tough market, I buy gold and gems. Anything on paper could become just paper.
I wouldn't put all 5K into it but you may want to look into p2p lending.
I think your best investment for $5k in this economy would be dividend stocks. There are quite a few that pay 3 - 6% right now. There are also some good ones that pay less, but have held up in this market (WalMart being one.) Some of the better ones I've been investing in include Johnson & Johnson, Kraft Foods, Coca Cola and Caterpiller. While none of these companies (or dividends) are guaranteed, most are consumer "staples" or products people must buy, regardless of the economy.
source(s):
www.morningstar.com
www.kiplingers.com
www.morningstar.com
www.kiplingers.com
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