Stock, bonds, CD’s or mutual funds?
I’m looking to invest $700 – $1000 into something, but I’m not sure what I should invest in. I don’t want to lose my money, so I don’t want something that’s very high risk, although I’m willing to take a chance. Should I invest in stocks, bonds, CD’s, mutual funds, high yield savings account, or a combination? I’ve never invested in anything before, and I’d like to start.. I don’t work right now, I’m a student, and I’m 23. I’d like to learn all about it myself, and do all of it online (like with eTrade or something similar). Any helpful advice would be appreciated. Thanks in advance.
I’m not exactly looking to start investing for retirement… I just don’t want my money to go to waste by buying something that I won’t later need, or by having it get .50 in interest in a savings account.
Before making any investment decisions you need to have a list of goals that you want to accomplish and the time horizon for each goal. Are those goals short term or long term? Each goal and the time needed to accomplish it will give you some direction in which to go. Generally speaking long term goals, such as retirement would require an aggressive portfolio — mainly stock funds but some cash and bond funds to reduce some risks associated with the stock market. Short term goals require a more conservative approach — mainly bond funds and some cash, though you may want limited exposure to stock funds. I say generally speaking as everyone has a different risk tolerance.
You mentioned that you don’t work at the moment so I would say a CD or a high-yield savings account and avoid mutual funds as they all carry some degree of risk and charge fees.
I hope you find this information helpful.