I am 21 years old and I am wanting to invest about 5,000 dollars, what would you suggest i do? Cds?

Question

I am not to familiar with any stock markets, only cds really. what would be the best plan for me.

Answer 1

Since you are young, you can invest long-term, also you can diversify.  You could put some money in safe options like CD's or treasuries, they are backed by the US government & you will never lose your initial investment, however interest rates suck right now.  Savings bonds double their value in 10 years & also earn a small amount of interest, so that's a good option since they are very safe & you never lose your initial investment.  On the down side, you won't earn a lot off interest in those type of investments at this point in time.  If you want to gamble, you could take a chance on the stock market, but you must think long-term on this b/c most stocks are low-priced right now & but will most likely earn more money in the long run.  You should never put all your money in one stock!  Time is the key.  It really depends on how long you can invest that money & what your needs are - do you need cash fast?  Do you want to earn interest?  Do you want to let your investment grow?  Maybe a mutual fund would be a your best option since that is based on a vast pool of funds that typically perform well.  Make $2500 a stock mutual fund, $2500 a bond fund & see how that works for you.  Well good luck & I hope you make a lot of money!

Edit:  Of course investing means you are committing your money to a certain period of time & don't need it for emergencies - there are often big penalties for early withdrawal.  Another great option - do you have a 401k with a company match?  That could double your investment right there.

Answer 2

go ira leave it for retirement. u will be rich

Answer 3

check out www.adultvest.com. it is an investment site for investing in adult films. they have a really great return rate. maxim did an article on them a few months ago.

Answer 4

Put it into a rock bottom stock that will prolly go up.  When you double your money pull it out.

Answer 5

Put it in the bank.  Five thousand bucks really isn't enough to invest in the stock market.  You're better off using it as an emergency fund and forgetting about it for a few years; even at low interest rates it will grow faster than you'd imagine, and it'll be safe.  

If you have to somehow invest it, buy an IRA associated with a stock index fund.  Then forget about the money for a long time.  Don't buy any of those weird annuities that the bank or insurance companies want to sell you.

Answer 6

dude seriously u should go to your local edward jones and have them invest it for u they will go over what u should and should not do they went to college for this reason ,

Answer 7

I was hoping with the number of responses that you received to find some adequate advice.  I was a little disappointed.   I hope that my advice will prove a little more beneficial to you.

21 years old is a great time to begin investing and now is a better time to begin that in the last couple of years because stock prices are lower than they have been.  

For someone with $5000, a mutual funds or index funds provide a diversified holding of equity investments, which over the long term have tended to outperform CDs by a long shot.  There are also tax advantages to owning equity investments as opposed to interest paying investments.

There are several mutual fund companies that have a wide selection of mutual funds to choose from that in the past have proved good.  Among those are Fidelity, T Rowe Price, and Vanguard.  You also have the option of opening a brokerage account with a firm such as Scottrade and buying from a very wide selection of index funds and closed end funds.

I do not recommend CDs.  The interest rates they pay are about 3% less than the current inflation rate and it may get worse than that.  

Since you are new to investing,  it would not be to your advantage to get too fancy.  For that reason I think an investment in mutual funds would be the best choice.  Since you have $5,000 to invest,  you have sufficient to buy 2 different mutual funds from either T Rowe Price or Fidelity.  That will provide you with better diversification than investing it all in just one fund.  Vanguard has a minimum of  $3,000 per fund.

Here is a link to T Rowe Price

http://mutualfunds.troweprice.com/?rfpgi...

One of my favorite funds is their Capital Appreciation Fund.  It is a moderate allocation fund that has an excellent track record.  

Another is the Global Stock Fund.  This fund is more aggressive than the Capital Appreciation Fund.  That means there is more risk associated with it, but also the potential of greater rewards.

Here is a link the the Fidelity Mutual funds.

http://personal.fidelity.com/products/fu...

A fund that Fidelity offers that has proved good in the past is Fidelity International Discovery Fund.

Answer 8

I assume that you aren't paying a lot in taxes.  

Put it in a Roth IRA (post tax contributions) and invest in a S&P 500 Index Fund.  

Take it out when you are 59.5 and pay NO TAXES on the earnings!!!!

You're welcome.

Answer 9

You should have a bit of money saved for emergencies (at least 3 months living expenses).  If you do not anticipate needing this cash withing the next 5 years, you should invest it all in a growth mutual fund (preferably within a Roth IRA).  Over time, growth stocks provide the greatest return.

Answer 10

You could invest your money in the stock exchange, and buy shares and see your money double , you can buy and sell according to the profit make

Answer 11

CDs are going to pay a fixed rate of interest, when you factor in inflation and taxes you might as well stick the money under your mattress and get the same return.

Your best bet would be to talk to a financial adviser as to your risk tolerance and ideas for investments.

Answer 12

If you want to play it conservative especially in this day and age. Invest in bonds.