safest, most effective way to invest $25,000?

Question

safest and highest money making way? first time investor too

long term or short term

Answer 1

Mostly everyone that has already answered has given great advice.

Get yourself a qualified financial advisor.

Answer 2

The safest way to invest $25k is to buy something that is guaranteed:

A CD
Federal Bonds
Money Market Fund (paying 4 - 5%)

The next safest way would be something that the principal is guaranteed, although you might not get the money right away:

Municipal Bonds (and the interest is tax free) - you will no lose principal if you hold the bond until it's due and you choose a high quality bond.
GMAC Demand notes (currently paying 5.75) - your money is liquid

Once you move into mutual funds, there is some risk - although if you buy into an S&P or indexed fund, your money will rise and fall at the rate of the market.

From there, you can go into bond funds, REITS (real estate), et al.

There are special funds for retirement which do the balancing of cash, bonds, and stocks - sometimes called by their year - like Fidelity 2040 fund - and that's managed for you. However, you can lose principal in everything but the first set of options.

For a first timer, do not go into individual stocks, learn on the safest methods, then move to mutual funds - you may never move to individual stocks (I do, but I like to dabble in the market and can afford to lose some bets - this is like gambling, you know).

Answer 3

I'd recommend investing in a type of mutual fund called an exchange traded fund. These are mutual funds that trade on the stock market like stocks and allow you to hold a little stock in a large number of companies easily. This saves you the trouble of researching individual stocks and also minimizes the risk that you'll accidentally invest in a bad stock.

Two funds that hold the stocks in the S&P 500 (a list of the 500 biggest companies in the US) are the SPDR fund (SPY) and the iShares fund (IVV). You can buy them by opening up a brokerage account (Scottrade, and tradeking are examples) and buying them like regular stocks.

These funds should give you about the same return as the stock market as a whole, which tends to go up 10% per year over long periods. The stock market is relatively volatile, but stocks tend to go up more than other types of investments over the long term and if you're young and don't need to use the money in the near future this is probably the best place to park your money.

If you have any other questions feel free to e-mail me: [e-mail].

Good luck.

Answer 4

If you have never invested before visit Vanguard.com they are one of the oldest and most respected financial companies around. Their website will ask you questions based on your risk reward tolerences to best fit your goals.

Stay away from investing in individual stocks until you learn how the stock market works. Try an investment simulator game there are quite a few online now just search for one.

The safest way by far to invest your money is with a high yield online savings account from someone like Emigrant Direct or ING Direct. They will give returns around 5% and are FDIC insured.

Answer 5

short term - safest FDIC insured CD's or short term US treasury bills? notes? I forget what the shortest ones are called.

Long term -- The above may guarantee your principal and seem safest, BUT (notice big but), after taxes and inflation, will you have enough for your goals? In the past, only stocks/stock mutual funds are able to (long term) beat taxes/inflation enough to make a big difference. In the past, pick any 30, 40 year period and stocks did not lose money for an investor. Will the future be the same? Only you can tell what is "safe enough" for you.

Answer 6

well first of b4 u invest have all your credit cards or high interest debts paid off. If you get lucky and find a winner stock or mutual fund thatngains 14% but you have a credit card thats maxed out and you have a 19% interest rate you have still lost 5%.
If you do not own a home then i would suggest looking there as well. You can use that as a downpayment and if it is greater than 20% of the homes value you can save yourself on homeloan insurance.
Good Luck

Answer 7

The problem is you have two goals which are at odds with each other. You want safety but you want effectiveness (profits/gains). All investing is about finding the right balance between risk and reward. It depends on your immediate financial goals but also your risk tolerance.

At the end of day, it's difficult to make a decision without doing a detailed inventory and evaluation of your needs.

Answer 8

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Answer 9

Get into Stocks or real estate. Real estate is safer. Stocks are riskier but so are the returns.
You may invest through funds to start with.

Answer 10

This is not a good place to get investment info. You need to find yourself a financial advisor with a license that you can trust.