With the volatility of the market these days, is it better for me to put it into a CD with a guaranteed return of at least 5%, or do you believe the market will improve enough that I can do more?
What type of account should I open, if I do decide not to use a CD?
2007-08-27 11:32:06 · 6 answers · asked by carmenPI 3 in Business & Finance ➔ Investing
Good question,
By the way good work in doing your research before deciding in which form you would like to invest your money. Make sure you understand all the aspects of your decision.
When it comes to investing, you have to first decide how much risk you are willing to take. A high risk account will obviously give you a better return if it folds out well for you. A low risk is pretty much a set return over time.
I have some money put away into a diversified mutual fund, it is a medium low risk. It is nice because I never have to stress about the stocks day to day, and no one should be anyway!!!
I frequent a blog, It has an article called "7 common mistakes made in investing". It has some good advice for people who are new to the investing game.
The link to the article is http://www.finance-your-life.com/?=21
Happy Monday
2007-08-27 11:42:55 · answer #1 · answered by daveguy48 2 · 0⤊ 1⤋
If it's enough of a lump sum then you could invest in various stocks and spread your risk around. I believe that the market will improve enough that you can do more, but that's only my opinion, and since I'm not rich, I'm far from an expert. If you aren't going to need the money for a year or two then probably your best bet bank wise would be a CD. Or you could split the money and put half in the bank and half into stocks, that way at least half the money is guaranteed to not go down, and the other half can be invested in the market.
I'd be very hesitant about a 33% return as Zero1 is mentioning about. There really isn't anything legal that can promise that.
2007-08-27 13:51:16 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I don't think in a year or two you're going to see a dramatic downturn in home prices. Of course, real estate is always local. Some areas might go down while others go up.
Right now in most places, it's a buyer's market. I'd say just park the money in an online savings account like at Emigrant Direct or one of the other FDIC insured online savings accounts earning over 5%. Then start going out and looking at homes. If you find something you really like, drive a really hard bargain.
I keep hearing about homes sitting on the market for months with no offers now. Come in and offer 10% less than they are asking. See what happens.
As foreclosures start increasing, the market should give a little.
2007-08-27 11:40:37 · answer #3 · answered by Uncle Pennybags 7 · 0⤊ 0⤋
A one year holding period is a short period of time. Look into money market funds that pay 5%. Citibank has one that pays 5%. A certificate of deposit limits your ability to have the funds and may not pay you as much interest.
Will you be spending all of the lump sum of money to buy a house? If not, have you started your retirement account? Have you paid off all your credit card debt? Do you have a three month rainy day fund?
2007-08-27 12:30:09 · answer #4 · answered by William H 5 · 0⤊ 0⤋
Check the returns on US Government Bonds - call Charles Schwab.
2007-08-27 11:41:53 · answer #5 · answered by fatsausage 7 · 0⤊ 0⤋
If you're interested in earning a 33% rate of return on your money let me know.
2007-08-27 13:12:02 · answer #6 · answered by Anonymous · 0⤊ 2⤋