I am a financial rookie with $5,000 I want to invest. What should I do with it?

Question

I am 31, not a homeowner, and I want to take 5k of my modest savings and do something productive with it, preferably through a service like TD Ameritrade. What would you do? (The remainder of my savings I plan to use for a down payment on a house when I am ready.)

Answer 1

If you're trying to save for a down payment, I'd be extremely hesitant to pour money into the stock market right now. We're at a historically questionable point in time at the moment, where the Fed has (possibly) stopped raising short-term interest rates, but inflation is also something to keep a close eye on. 6 months from now the S&P 500 could easily be 20% higher or 20% lower than it is right now. With anything less than a 5-year time horizon, I'd consider putting money into a CD (Certificate of Deposit), which actually have pretty decent rates right now. You can look at sites like bankrate.com to find the best rate, it doesn't really matter what bank you choose since CDs are FDIC insured (as opposed to stocks and mutual funds, which are not).

Answer 2

Take $100 or so of that $5,000 and buy a couple of books on investing. Maybe "Investing for Dummies" might be a good beginning. Learn how to read a balance sheet and income statement. Learn how to read the technical indicators on a stock chart. Learn how to evaluate a mutual fund. That $100 will pay you large dividends in the end.

I have a TD Ameritrade account. It is ok. Their reseach resources are somewhat lacking though. Fidelity has much much better research but their commissions are considerably higher. Sort of you get what you pay for.

Answer 3

Hi,

I would personally put it all into IFON - Infonsonics Corporation they are way undervalued right now and if you held for 3 months or longer I believe it should work out okay for you. But that is just me personally because I think diversification is for the birds. I have watched it for a while, it is very volatile but for only 6.00 dollars they are a deal. There last quarter was great just the option expensing made it look bad. I would hold until it reached at least 8-10 range before selling.

Answer 4

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Stocks Market
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Real Estate Services
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Answer 5

If you like stocks buy UST (if you don't mind buying a tobacco company), wait till it hits 69, low 70s if you're bold, then sell. Then get into some cyclicals because they should be dirt cheap by then. I'd buy CAT. If investors are still screaming recession, hold off buy the CAT for a while or buy some YHOO. I really like what they've done with the place.

Answer 6

I would check out Money Magazine's May issue of this year. The main focus was WHAT TO DO WITH $5000 to invest NOW. ;) I found it very informative, it has every level of investing from real estate to cds. Here is the link: http://money.cnn.com/magazines/moneymag/moneymag_archive/2006/05/01/toc.html

Answer 7

Buy a 6 month CD and spend the next 6 months learning how to answer the question for yourself.

Answer 8

read tips on investing and stocks that will help you on this site

Answer 9

Put it in a fund called MMLP.

Answer 10

Give to me and I'll make your money work.