What exactly are stocks, bonds,and mutual funds? I want to invest in something for a short period of time...?

Question

I have 7,000 dollars to invest for less than a year. See I was going to put it in the bank but then I decided that it would be smarter to invest it in something very low risk. When I say low risk I mean something so low risk that their is virtually no chance in me losing my money. At the same time I want to make more off my money than the interest that the bank will give me. Can someone explain to me what stocks, bonds, and mutual funds are and give me advice on what to invest it?

Answer 1

Stocks are owners interest in a company, Bonds are debts of a company or entity. They borrow from you. Mutual funds are allocations of stocks and bonds. None of these are suitable short term investments. If you want no risk of losing money than an insured CD is the way to go for your time frame. There are some low risk investments, but there is still risk of loss. Some money markets are also insured, check around for a bank that will do that. Expect fairly low returns as well. The greater the risk, the better the potential return and vise versa.

Answer 2

don't be a fool. keep your money in a safe deposit box. a crash is very near

Answer 3

To answer your question properly would take too much time and space.

Here are some websites to get you started

http://moneycentral.msn.com/home.asp

http://finance.yahoo.com/

http://www.investors.com/?tn=top

http://www.rookiedaytrader.com/default.a...

http://investorshub.advfn.com/default.as...

http://www.thestreet.com

http://www.brokerage101.com/

http://www.1source4stocks.com/

http://www.decisionpoint.com/TAcourse/TA...

http://stockcharts.com/

http://www.grahaminvestor.com/

http://www.thestreet.com/

good luck and don't let any one tell you not to invest, and keeping your money in the bank is not investing

Answer 4

Put it in the bank or a money market fund.

Nobody can give you a higher return without adding to your risk. In the short term, like one year, a lot of things fluctuate and you might end up with a loss when you go to cash out.

Answer 5

go to www.bankrate.com and look for the bank that has the highest yield for a 6 month CD.  Stocks, bonds, and mutual funds are for long term investing (10+ years), not for less than a year.

Answer 6

One year is short term.  Put it in the bank.  A stock is a partial ownership of the company you have bought the stock in.  You buy it with the expectation they will make money and the value of the company and the stock will increase.  A bond is a loan of money to a company which pays a set rate of return, which has less risk than stock and also less potential return.  A mutual fund is a grouping of many stocks and/or bonds.  The purpose of mutual funds is to spread the risk of one company having financial problems which would make your stock decrease in value.

Answer 7

That's way too much to explain here.  Read "Investing For Dummies" for a good starter book.