I have $40,000 in the bank, and want to invest in something.
2007-09-29 05:55:15 · 9 answers · asked by Anonymous in Business & Finance ➔ Investing
assuming you live in the US....
right now, I would say stocks - b/c the real estate market is currently falling. that might not be true ~everywhere~, but in general, the trend is that it is falling in many areas in the US.
if you invest in stocks, go w/ mutual funds if you're not familiar w/ investing - they are a great way to diversity (which keeps your risks down). look for mutual funds w/ low expenses/fees. again, for even more diversification, I personally would split the money between several different types of funds. i would suggest splitting the money between three or four funds: one of large-caps/blue chips, one of small-mid caps, and one or two international funds. For your international fund, do not buy into a very specialized fund (e.g. one that concentrates in only one country) - go w/ one that covers a broader range of international markets (e.g. one the covers an larger area, like east asia, western europe, or eastern europe).
if you do decide you're rather invest in real estate, I would hold on to your $$ until the housing/real estate market looks like it may be starting to pick up again, ~then~ purchase something. while you are waiting, move your money to a bank that pays a good interest rate if yours does not. if you put it in ingdirect.com, you can get an interest rate of 4.3% right now; more if you put it in a cd. (shameless offer - if you don't know anybody w/ an ingdirect account, i can refer you & get us both a bonus from them if you open an account). at emigrantdirect.com, I believe their interest rates are even higher. also, a lot of banks these days are offering ~5% interest rates on cds of varying terms (6 months - several years - I would go w/ a shorter term cd, & renew as necessary, b/c the rates for the shorter term cds are not that different from longer term ones & you can have the peace of mind knowing your $$ will not be unaccessible for a very long time should you need it).
& also, just a note - in case you did not already factor this in, don't forget to keep around some savings, just in case you need it in a pinch. again, keep that money in a high interest savings account, such as ing or a local bank that has good rates.
hope this helps!
2007-09-29 06:16:53 · answer #1 · answered by anna 2 · 2⤊ 0⤋
Stocks are NOT like the lottery. Penny stocks might be, but blue chip stocks have consistently outperformed all other investments for the last 100 years. Real estate right now is a disaster due to sub prime loans, and will continue to be a problem for at least 2-3 more years until the inventory is burned off.
Warren Buffett, the richest man in the world, buys high quality mutual funds. Do you think he knows what he's doing?
Read Barron's, the Wall St. Journal and Business Week.
Study, and do research. You can get rich slow, or you can get poor fast. It's up to you..
Good Luck
2007-09-29 06:02:39 · answer #2 · answered by edco 5 · 1⤊ 1⤋
Both. They are different asset classes and react differently to economic conditions. It may seem that stocks provide the best return in the longterm. But, the market could take a downturn a couple of years before you need the money. Real estate is also a hedge against inflation where inflation hurts stocks in the short term.
2007-09-29 06:05:03 · answer #3 · answered by jeff410 7 · 3⤊ 0⤋
There are thousands of stock and thousands of real estate options .
There is NO better , because either can bankrupt you & either can have good returns .
It totally depends on your knowledge of the investment .
Lots of people make $$$ on stocks , and lots of idiots loose tons of $$$$ .
What do YOU know about stocks ?
Same with real estate , lots of people in foreclosure and bankruptcy now ,
What do YOU know about real estate ?
Only YOU know where your knowledge lies .
If you do not know either , start studying yahoo finance ,
There is an education section under the investing tab .
http://finance.yahoo.com/
good luck !
>
2007-09-29 06:01:16 · answer #4 · answered by kate 7 · 2⤊ 0⤋
Stocks can be a good investment. Just not the safest way to invest. I would take my $40,000.00 and invest it in very safe insured high APY, as high as you can find anyway, CD's. The money is safe, insured usually up to $100,000.00 and will make you money on the interest. Good luck.
2007-09-29 06:49:37 · answer #5 · answered by Anonymous · 1⤊ 1⤋
As already noted, there is no single, simple, answer to this.
However, when you buy a house to live in, that is almost always a good move, since it is both an investment and a place to live.
2007-09-29 06:41:03 · answer #6 · answered by r_kav 4 · 1⤊ 0⤋
If you already have a house then stocks is the best way to go.
2007-09-29 09:55:04 · answer #7 · answered by Anonymous · 1⤊ 1⤋
Stocks are like the lottery... you can make a lot quickly if you're lucky! Real estate is the route I would personally go. Land is valuable no matter what the economy is like.
2007-09-29 05:58:10 · answer #8 · answered by Kimberly B 3 · 1⤊ 4⤋
stocks
2007-09-29 06:54:41 · answer #9 · answered by phildarthebuildar 3 · 1⤊ 0⤋