Okay, someone has $2,000 to invest and knows nada about investing. What's your best sound advice for her?

Question

This person does know that he or she wants to invest for the long-haul. They are not trying to gamble away their money with a risky investment. They still want to have this money in 5 to 10 years. So what options do you suggest? Stock market? Mutual funds? Bonds?

Answer 1

If you don't tolerate too much risk, your best choice would be mutual funds.  Mutual funds are collections of stocks and bonds.  There are diversified so they are less risky than stocks and they are professionally managed so you don't have to worry about what stocks or bonds to purchase.

In order to trade stocks, bonds, or mutual funds, you will need a brokerage account.  I currently use Firstrade ( http://www.firstrade.com/ ).  They are cheaper than big name brokers such as Etrade, Scottrade, Ameritrade, and Schwab.  Their website is also very easy to use, making it perfect for beginners.  I would definitely recommend Firstrade.

Answer 2

Since you know "nada" about investing, your first step should be to invest some time into learning.  It will pay off in the long run.  A good site is Investopedia.  They have a number of tutorials that will help.

http://www.investopedia.com/university/

If you would rather not spend the time and effort to learn about the stock market, go with mutual funds.  Vanguard is highly rated and has some of the lowest fees.

https://personal.vanguard.com/us/home

Good luck.

Answer 3

Go to ur bank and see if they offer CDs (Certificates of Deposit) thats the easiest way with that amount after that ya mutual funds are good. Good Luck

Answer 4

Split it up in some ETFs (via an online stock vendor) between Standard and Poor's, NASDAQ, the DOW and pick a couple of international ones too (China and/or India are growing right now).  Then throw $10-$15 into each one at least once a month (reinvest any earnings) and you'll see good, steady growth over the next 5-10 years.

Answer 5

I would honestly suggest that you decide what type of investing suits your personality best. Are you an analytical person who likes to do research for hours on end and then make methodical decision?

Or are you a person who likes highly visual and fast paced situations, like video games or computer programs with visual feedback.

Are you patient and willing to hold onto a trade for weeks, or are you a starter who likes to get things rolling but has no mind for the boring long haul?

These different personality traits should determine which investing style you should approach.

If you are a methodical person who has patience then consider stocks or bonds investing using "fundamental" analysis which focuses on economic factors such as supply and demand, and also internal factors such as management analysis.

If you are a bit more fast paced, a starter, who likes to get things rolling, and make judgments quickly, then consider trading, futures or the forex markets where the action is a little faster paced and investments can last for days or even hours if you have the temperment for day trading.

This type of trading involves "technical" analysis and is based off of price information. It focuses on chart formations that are made by the daily price of the currency, future, or even stock.

A technical investor will look at a chart and search for classic trading signals such as tops and bottoms 1-2-3s or support and resistance price points.

Here's a link for fundamental analysis to learn more:

http://en.wikipedia.org/wiki/Fundamental...

Here's a link for technical analysis used in currency trading to learn more:

http://forextradingrobot.info/forex_day_...

Answer 6

For right information on this topic you should visit:

www.sharetips.99k.org

Thanks.

Answer 7

Stock markets are the best as of now. Even though there is a seller sentiment at the market you can find a lot of cheap good stocks. If you are ready to buy and keep them for a long term you are here for a pleasant surprise. You can make a fortune here.