Best Way To Make Your Money Grow?

Question

Whats the best way to make your money grow in a 5 years?

Answer 1

The DJIA today closed at 11002. In June of 2001, five years ago, the DJIA was at the 11000 level. In other words, in five years, it has delivered zero return. And in between, it has traded as low as 7200 (nerve wracking!). There have been some dividends, but also to invest in a DJIA index fund, there would have been some small expenses, leaving you with a net return of maybe 1% per year. Chump change!

The S&P500 today closed at 1264. In June of 2001, five years ago, it was at 1260. In between 2001 and now, it has traded as low as 775 (again, a gut wrenching ride). So, same as is the case with the DJIA, the return earned over the past five years has been barely above zero.

The moral here is relying exclusively on one index fund, or even a combination of index funds that trade within one country (ie. the USA), can leave you with zero growth. Even an index as large as the S&P500 can be stagnant ... recent history proves that.

Most experts these days are recommending a mix of US-based index funds AND some bond investments AND some international exposure (such as an EAFE index equity fund, an acronym which stands for Europe, Australia and Far East). Especially with there being some doubts about the US Dollar, some international exposure may be wise.

Answer 2

It depends on the amount of risk you want to take. The S&P 500 index fund is a good choice. There are other indices such as small caps that may give a greater return at a higher risk. There's also CDs too if you prefer low risk. Diversified may be the way to go.

Answer 3

An S&P 500 Index Fund with Vanguard. go to vanguard.com

Answer 4

I concur with previous answerer. You might also want to look at a high yield money market account from capitalone. The APY is 4.55% and growing.....

Answer 5

Save and invest wisely