What should i invest my money in?

Question

I have 5000 dollars and i want to invest it so that it can grow and make me money.

I am willing to take moderate risk in my investment oppurtunity.

I was thinking about investing in rail roads and trains.

Answer 1

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:
http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://flagship.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)

529 plans: http://www.savingforcollege.com

Answer 2

The ETF TIPS for now. There is talk of a major down turn so you will be able to pick up some bargins. Your homework should start now to see what stocks are doing well now and what stocks have done well through or have bounced back after a major downturn. For instance Yahoo was once a $400 stock and there was no bounce back. Meanwhile EWW and EWZ bounced back well after the last crash.

Answer 3

Secret Domain Name Investing
http://070882.ry4wn.hop.clickbank.net/

Answer 4

If you do have debt, pay it off.
If your cash reserve goal is met then invest it in e.t.f.'s that mirror the market and you pay a lot less than mutual funds and are less risky than owning indivitual stocks.

Answer 5

Checkout currency trading, there is a site called babypips.com that teaches you how to trade, it take you from 1st grade all the way to college, there is a quiz after each grade and once you pass it you move on to the next grade. Its totally free. Once you understand it, go on forex.com and get a free account with $10,000.00 virtual money to trade for 3 months and then put you own money in it. Its alot of fun and if you have the patience you will make a ton of money.\
Good Luck!

Answer 6

no, you should invest it in me. i have a high yield, and a low interst rate. alot of risk, but you could prosper in the end..

Answer 7

You don't give a time frame or your age. These are important things for us to know in order to give you a sensible answer. Please read my profile.