I am about to receive a $45,000 bonus. What is the best way to invest it to make the most of my money?

Answer 1

Congratulations, of course, you won't get to see the whole thing (tax withholding). But there are some nice places to cover a lot of bases economically: every share of NY buys you into the 100 biggest (market capitalization) companies on the New York Stock Exchange (they got big somehow, maybe you want to get big with them); want to buy the 100 biggest publicly-traded global companies, then IOO; DVY buys you into the Dow Jones select dividend stocks, a hundred of the most stable dividend payers with solid balance sheets; want dividend payers that are outside the US, look at IVY; and oodles more to choose from.

These exchanged traded funds (ETFs) have low management fees to sap your value, as opposed to the normal managed accounts at a regular mutual fund. They commonly trade very near to their net asset value (NAV). Since ETFs trade like normal stocks, you don't have to worry about market timing or such rules, and the commission is the normal commission you would pay for buying stocks (like $7 at Scottrade.com). Of course there are the early ones like DIA buys the Dow Jones Industrials and SPY buys the Standard & Poors 500. If you buy into them, then anytime you hear the general market news, (Dow up, S&P down, etc.) then you know what your stocks did that day. By the way, check out IYY, the Dow Jones Total Market fund, or ISI, the S&P 1500.

Sometimes when the general market moves up, it is hard to pick the one or two that flies higher or faster than the rest of the flock without also possibly picking those that are going the other way. With tools like these you buy the bunch of them and when they fly north, you do too, or if they fly south you do too, but with broad bunches, since not everyone is always tanking at the same time, those rising average out (to some degree or other) those who are falling.

Answer 2

A diversified portfolio.
According to financial theory widely accepted and used in practise. The only investment with a guaranteed return is FDIC insured accounts or goverment bonds. (pays around 5% but some of that is eroded by inflation 2%) Beyond that super-safe option the more risk you are willing to take the greater returns you can expect.

Once you have developed how much risk you are willing to take (and understand what type of return you can expect for that level of risk) you need to figure out the best way to diversify your investments to reduce the chance of large losses. Diversification uses the principle of not putting all your eggs in too few baskets.

A financial advisor can help you assess you risk tolerance level and then advise you how much of your investment to allocate to US stocks, International Stocks, bonds, and/or cash.

If any investment was certain to be worth more next year, the price would have already risen today.

A consulatation with a financial advisor is a good idea. Ideally look for someone who is fee based ($100-$250 is reasonable and should be enough). Be wary of hidden fees from the advisor and from mutual finds. In general aviod closed end funds, funds with upfront fees, and funds with an annual expense of over 1.25% (of your initial investment) per year. (index funds cost as little as 1/10th of that because they are not actively managed, and research shows that for most types of investments they do as well as active funds after expenses on the actively managed funds are taken into account).

I great website is IFA.com. There are also some good for dummies books on investing, which anyone with a five digit portfolio should invest the time to learn about.

good luck

Answer 3

Assuming you don't have any special investing talants anywhere else I'd suggest the following.

First, pay off all debt. The only exception may be mortgage debt which is tax deductible, or possibly any debt you have at a really, really low interest rate.

With anything lelft over, invest in mutual funds. Go online and run some searches to find some of the best ones and buy 1 or a couple of these (I'd suggest funds that have a Morningstar 5 star rating, and are no-load - beyond that its up to you).

Answer 4

You want to get investment advice from strangers with no idea of their qualifications or motives. Be very very careful.

Learn about asset allocation. Open an account with;

Schwab or Fidelity Brokerage.
T. Rowe Price.
Vanguard.

Ask for investing help. Don't take any recommendations at face value. Know what you're getting into. The more you learn the better off you'll be.

Answer 5

Pay your high-interest debt. Assuming you don't have any, you can buy a Milestone fund. Just figure out the year you want to retire, and lump it in there. The fees are a little higher, because the manager will be doing more for you, but it invests your money in higher-risk, higher-return stuff near the beginning, and lower-risk, lower-return stuff near retirement. It involves little thinking on your part, which may seem right to you, if you are looking for investment advice here...

Answer 6

Pay off any debt you have. Then invest in an Individual Retirmement Arrangement (IRA). The rest depends on your risk tolerernce. Anythng from CD's and money market funds to bonds and mutual funds.

Answer 7

1

Answer 8

Congratulations!

No dis-respect, but this isn't the best place to get financial advice. Why not ask some friends and family for recommendations and talk to a few financial advisors?

Answer 9

there is a program called investools or invest tools its amazing check them out on the web.

Answer 10

401-k.