Are cds a good investment for someone just starting out?

Question

So I am a 20 year old full time student and I also work full time. My job pays me well for my age and I am looking to invest. Would a cd be a good choice?

Answer 1

If the CDs are  going to be used for music i.e an artist's album, then probably not because the demand for them is going down, in comparison to digital downloads. I'm not too sure if i have answered your question properly though?

Good luck anyway.

Answer 2

Certificates of deposits are very low yielding low risk investment, you are guarenteed you dont lose any money but you make a very low return.  Someone as young as you should be in equities.  Buying mutual funds or ETFs are good ways to start out.  I think ETFs are the best, they trade on the market like an individual stock but they represent ownership of many stocks which means you are automatically diversified.  Im sure you know of the risks of the stock market especially in todays market but if your only 20 then you can afford to lose a little bit in the short term cause the market always makes you money in the long term.  IBB is a great ETF that invests in Bio-tech companies, there are ETFs for every industry, growth stocks, value stocks, emerging markets and anything else you can think of.  You can do an ETF search on www.wsj.com and learn more about them.

Answer 3

CD's are the absolute worst choice.

Why?

You get a NEGATIVE rate of return after figuring in inflation.

CD pays 5%

Inflation 10%

Return BEFORE taxes (-5%)

Esentially you're losing 5 percent per year.

Here's a better idea.

Learn how to invest.

Top 10 investment books (Stocks)

1. Reminiscence of a Stock Operator

2. The Disciplined Trader

3. Mindtraps-Unlocking Key Investment Success

4. Market Wizards, and the New Market Wizards

5. Secrets of the Millionaire Mind

6. Sedona method course http://www.Sedona.com

7. Invest Like a Shark

8. Breakthrough strategies for predicting any market http://www.LucasWaveInternational

9. Listen to Financial Sense Newshour every weekend http://www.FinancialSense.com

10. Keep a detailed record of EVERY trade you do win or lose.