What (safer) investing options do I have with $1000?

Question

I was considering buying a CD with my credit union, but their rates would leave me earning only $32 annually with that amount. Please take into consideration that I'm younger and working part-time, so this is about all I can afford to invest at the moment... I'm looking to invest the $1000 short-term (6 to 8 months) and would like a less risky option that the stock market with a little better yield that my credit union (3.25 APY). Is there ANYTHING out there?

Answer 1

Money-market fund, but most want $2500 minimum to open an account.

Answer 2

If the stock market is too risky for you and if a CD does not give you enough return, then the middle ground would be mutual funds and ETFs.  Mutual funds are collections of stocks and bonds and ETFs track indexes or industry sectors.  Both of them are diversified, thereby reducing risk.  If you are new to investing, I would recommend that you stick with mutual funds because they are professionally managed so you don't have to be an expert with the markets.  If you were to invest in ETFs, you would have to at least know which industry sector are performing well and not so well to know which ones to buy or short.  To learn more about mutual funds, ETFs, or investing in general, I would recommend checking out Investopedia ( http://www.investopedia.com/ ).

If you do choose to invest in either mutual funds or ETFs, you will need a brokerage account.  Since you do not have that much money, I would suggest opening an account at a discount online brokerage because they have cheaper commission rates than full-service ones.  I currently use Firstrade ( http://www.firstrade.com/ ) and I am very happy with them.  Their rates are lower than the big name brokers such as Etrade, Scottrade, Ameritrade, and Schwab.  I would definitely recommend that you check them out.

Firstrade currently has a refer-a-friend program, so if you're interested in opening account with them, email me for a referral code.  It's a win-win situation because you'll get your first 5 trades free.  I don't think the free trades will work on mutual funds though, but they should work on stocks, options, or ETFs.

Answer 3

Invest in Mutual Funds: These funds are a type of security that can be traded on the stock market, allowing shareholders to buy and sell shares in the funds. The revenue generated by purchase of shares is used by mutual fund manager to buy more shares of specific stocks, bonds, and other market securities and money market instruments.

Since the prices of the stocks, bonds, and other securities held by the mutual fund vary, the value of the fund changes. The average value of every share of the mutual fund is fixed daily based on the total value of the underlying securities held by the fund.

This involves the shareholders of a mutual fund directly with their investment as against those who just buy individual securities and observe as the prices fluctuate

http://debts-to-wealth.com/category/Guid...