Is it more beneficial to invest your money in mutual funds of in cd's?

Question

Its a good amount of money to invest. Is 20,000+. I want to invest the money for long term, possibly 5-10 years. Any suggestions?

Answer 1

CDs at 4 or 5 percent will barely match inflation in your time span...even the most conservative of mutual funds SHOULD do better. Easy enough for you to do " half and half" for three years or so...then compare your results and take action accordingly.

Answer 2

Cd's are a sure thing, but the return is low.  Stocks and bonds are erratic (up 20% one year, down 10% the next) but overall the return averages about 10% or so and if you screen for really good Mutual Funds it can be better than that.  If the time frame were really short I'd say go with the cd's but for a pretty long time frame like that (7.5 yrs average) you'll probably do ok in Mutual Funds.  So, I'd go with mutual funds, just make sure you screen for some really good ones and diversify your holding pretty well.

Best luck.