$6,000 to invest, 8 months to do it in, stocks or mutual funds is the answer?

Question

I have $6,000 I want to invest, but I only have 8 months before I need to pull this money, and its profit (hopefully) out for a down payment on a mortgage (i'm not suggesting this will be all the money I put down,but follow me along here). My question is should I invest in a mutual fund (is 8 months enough to see profitability?), stocks (i have a few in mind), or maybe even a 5% annual yield savings account ? Suggestions from those who actually know

Answer 1

It depends on your risk tolerance. Obviously, since it is a down payment, you are probably looking more for principle preservation than high growth with high risk. I would look at a GNMA mutual fund or your 5% savings account to maintain the principle with a modest return. If you can afford to lose a little, but have the potential to earn a higher return, try a stock mutual fund, maybe an S&P 500 fund. If you are willing to take even more risk with the potential of an even higher return, try investing in individual high tech or biotech stocks.

Answer 2

Stocks? Nope, definitely not. Mutual funds? Maybe something like Vanguard's Money Market fund, other companies have them too, but be careful on the withdrawal policies. You will have to read the fine print.

Best bet for your situation? Call the local banks and get a good certificate of deposit rate for 7 months, so it matures before the 8th month when you need it. CDs are often very flexibly sold by banks, or you can do combinations (especially when you see rate breaks, you'll notice a pattern when you start shopping CDs). Some banks will give a good rate for certain short periods, so you might do Bank A for three months because it has a good rate, then maybe Bank B has a better rate for the next three months, then maybe Bank C will have a good rate for one month (or some combination).

You have safely reserved your principle and got the best available rate of interest on the money until you need it.

Answer 3

Definitely the 5% savings. Although the interest rates might drop a bit in the near future.

As for mutual funds, I wouldn't do it since the markets are extremely volatile now, it's impossible to predict what will happen. Only if you had a decade to invest, then I would do it.

As for stocks, well, only insiders typically get rich (illegally) with stocks in the short term. With all the biofuel pooha, you might want to consider corn futures.

Answer 4

I think you should invest in Real Estate. You will be amazed what you can do with that $6,000. Buy a property and wholesale it. You can also do it with no money down. It really works. Maybe pay for a training siminar and get started with that money. You'll be amazed at what you will profit. Good luck!

Answer 5

Try international (Asia or South America) ETFs.

Answer 6

I can offer you $1,400.00 (24%) for 12 months.

Can you wait that long?

I am a Portfolio Manager.