Anyone have GOOD advice to invest about $20,000?

Question

I am receiving about $32,000.00 from my father's estate. I will be paying off a student loan for my wife of about $10,000.00. I really want to invest the rest as I am not in need of it. Relativley inexperienced with investing. I have also thought about putting $1,000.00 in penny stock GDLB. What do you think?

Answer 1

First thing I would look at is your tax liability for receiving this amount. Once you figure this out, ensure you also have the proper amount for emergency funds (3-6 mos salary).
Next, go on the website and choose a "good", low-cost, reputable investment firm, such as Vanguard (my personal favorite), T. Rowe Price, Dreyfuss, etc. on the website who's expenses are very low. If you go to a bank or broker, you will be paying as high as 8% in commission.
Since you mentioned you're relatively inexperienced in investing, I would stick to "index" funds. I call these "no-brainer" funds.
Last, and most importantly, DO NOT INVEST IN PENNY STOCKS AND DO NOT LISTEN TO STOCK TIPS FROM YOUR "UNCLE" OR FRIENDS WITHOUT DOING YOUR OWN RESEARCH!!!

Good luch in your search.
gc

Answer 2

Penny stocks are usually very risky, I would not put more than about $500 into a penny stock, and that is a high end.

GLDB has very low volume for a penny stock and I would not consider it. See Yahoo! Finance GDLB.PK

Student loans are usually a very low interest rate. It would be very nice to do for your wife, but instead, consider putting $10,000 into a REIT mutual fund such as UMREX or TAREX (or both) which yields about 20% per year, and make all or part of the payments on the student loan with the dividends received, while the value of the fund still increases.

Pay off any high interest credit cards instead, or put some in an emergency fund, or both.

Your should also increase your deposits to yours and your wife's retirement accounts. Did you know you can put money into a Roth IRA for you and your wife even if you are contributing to a 401K or other company sponsored retirement account. If part of that money is from your father's retirement account, you might be able to roll it over into an IRA also.

Good luck to you in all your investments.

Answer 3

I haven't done any research on GDLB, but I would make sure that the stock has some daily trading volume, otherwise it may be difficult to sell your investment when the time comes. Small stocks like yours require a lot of research before investing capital. If you have done your research and see an opportunity, then go ahead and risk a little bit.

If you want another interesting small stock, I would suggest Tower Tech, TWRT.ob - they make wind towers. Their business is growing. Here is a link:

http://www.top10traders.com/ViewPost.aspx?postID=82

This is from http://www.topo10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors.

Hope this helps.

Answer 4

Great responses so far!

***Warning about penny stocks: 80% of "penny" stocks go to $0.00 within 5 years! Be very cautious - they are low priced for a reason! ***

There are lots of safer, more realistic places to park your money & at least maybe get it back plus a little interest.

If you are in doubt, a no-load mutual fund account with an expense ratio of LOWER than 1.00% ; or an ETF (exchange traded fund) both of which you can get through Vanguard or Fidelity (my fav is Dodge & Cox) will serve you in good stead.

Depending on how much you want to learn, these web sites below have a lot of helpful info.

Good Investing to you!

;-)

Answer 5

Not a big fan of the penny stock idea.
First I think you should compile a list of all of these answers, sit down with your wife and partner and see which one is best for you guys.
1. You can never go wrong in real estate. Have you ever watched Property Ladder on TLC and thought, wow I can do that and double my money?
2. Do you want to start a small business with your wife?
3. Do you want to use this towards a token to wanting to retire earlier and work with a financial rep and put in an account that you are comfortable will grow towards your long term financial goals?
Good luck.

Answer 6

Do not buy Penny Stocks!

You will loose your money. Pay off your debts and buy stocks. Since your not really experience I will recommend you buy a safe mutual fund, go for a mid cap fund you will get a average annual rate of about 10% a year. Go to CNN money and look under Finance and research Mutual Funds. If you don't want to do that, I would buy American Express Stock (AMEX) and probably a Gold Stock (AUY) buy level 3 commucations (LVLT) and hold it, Starbucks is also good. Also I like Lockhead Martin (LMT)..

Answer 7

Put $4K in each of you and your wife's 2006 and 2007 Roth IRA ($16000). Then put $4k in a brokerage account. Doesn't sound like you know much about the stock market. Put it in a some Fidelity mutual funds or something simple like that.

You wouldn't go to Las Vegas and play poker with card sharks, why would you consider investing in penny stocks? Someone who knows what he is doing is just going to "take" the money from you.

Answer 8

Penny stock always bad advice. ADX & PEO are two great close end funds trafing on the NYSE for decades. Big cap growth in 1st + energy in the 2nd. Sell below asset value. Can buy & forget.

Answer 9

Fully fund you retirement funds like IRA's and the ones at you job. That will use up most of the money. Use the rest to get smarter. Take a class or buy books on your profession.

Answer 10

penny stocks arent an investment, its gambling, take the money and buy lotto tickets you have the same chance

they are cheap for a reason

take the 20k and put it in a nice diversified fund, better to make 10 to 12% on it until retirement than to gamble on stock picking penny stocks