I have $5000 to invest, are mutual funds a good idea? Hoping to make a decent return.?

I have never invested anything before and would like something with a fairly quick return.

For a quick return mutual funds are not the optimum investment. They generally invest in a large number of different securities which tend to have a dilutive effect on returns. However, they are a less risky method because of the large number of different securities.

If you are looking for a quick return, you need to pick an individual stock that might possibly have a quick return. Mutual funds are more specifically for long term investors who wish to mitigate their risk.

But having said that there indeed are some mutual funds that have given very impressive quick returns in the past if your idea of quick is not too quick.

Indeed if you have $5000 and are not well educated in the peculiarities of investing a mutual fund is a much safer alternative than investing in an individual stock.

I'm not sure what you mean by a quick return, mutual funds are good for long term investing, but you won't be doubling your money in a month or anything like that. You can find some good online savings accounts at www.bankrate.com that can get you 5% or greater, and keep your liquidity (ability to access the cash if needed fast).

If you want to invest for the long term, I'd suggest doing some reading at www.vanguard.com, they have some great index funds with low costs.

For long-term investment, I think stock mutual funds are a great idea. (Over long periods of time, stocks historically provide the best returns.) For short-term, I don't...because of the volatility in the markets. Ten months from now, the markets could be up or could be down. Ten years from now, they will almost certainly be up.

If you need the money within a couple years, I'd personally stick with CDs or a money market fund.

Since you're new to investing, let me offer this advice: "I'm looking for a quick return" is usually equivalent to "I'm about to make a mistake". While it's always possible to get lucky and buy a stock right before it shoots up on a buyout announcement or something like that, that's rare. Most successful investors make money slowly but steadily over time. If you're looking for a quick "get rich quick" kind of investment, you're likely to fall for scams or at a minimum invest in something high risk and lose money instead of getting rich quick.

It depends on your time frame for investing. It sounds like you are more short term. Since you have only 5000 I would put it into an online savings account like HSBC Direct or ING Orange Direct. They earn around 4.60% right now and you won't be hit with trading fees of buying securities like mutual funds and stocks.

Though if you decide to go the mutual fund route try to pick low expense ratio funds like Vangaurd or DFA funds. Good luck, sounds like you have the right idea of keeping your money out of checking and regular bank savings accounts.

Read this book: "Investing For Dummies."

Solar Stocks will be in demand with a recession or not.. You could play individual solar stocks like FSLR, YGE, JASO, ESLR... or you could play a little bit safer bet with PBW - which is a mutual fund for solar and green energy

Buy a Canroy (canadian oil & gas royalty trust) You can find their stock symbols on yahoo finance. I personally like HTE as it pays 18% interest per year. Another one that i also own is PVX (it is paying about 14% right now) There are a few others out there and they are all pretty low right now (I believe due to the fact that the candian government is taxing the income but it really shouldnt matter because you can file a form 1116 at the end of the year and get a tax credit for what you pay) So with a Canroy like HTE, you could have a nice little income of 75$ per month and most of us that own that one know that the stock price fluctuates between 20 & 30 per share (its at 20 now) so when it goes to 30, you could have 7500 by then.

Here is a link to a mutual fund scoreboard that I think is even better than Morningstar, the commonly assumed leader in mutual fund info: http://bwnt.businessweek.com/mutual_fund...

If you have a Scottrade account, look for their feature, it is a beaut, but I won't give you a link, you have to have an account to get it. Still, for $5k, some ten times their minimum, you could do that pretty easily: http://www.scottrade.com/

PCU looks good for a 1 yr turnaround

No, mutual funds are not the best idea. There are better alternatives to make a decent return.

Since the stock market is not going so well, overseas investments would be the best choice.

Starting a small business would be the way to go if you have time.
Alternatively try to invest in someones business. You may receive up to 20% guaranteed interest a year. You will not get such high guaranteed returns on stocks, mutual funds, bonds or CD's.
If you invest $5,000 at 20% annual interest rate, you will get back $6,000 in 1 year. I run my own business and my net profit is over 5% a month.

Email me at investment4us@hotmail.com and I'll give you a valuable advice if you are serious about investing. Please don't forget to mention your nickname and question at Y.A.
Best of luck!

No.
There are other ways to get guaranteed high returns.
Check my profile and email me for a free advice if you really want to earn money.

I don't like stocks. I have invested in small business. Now I am earning 2% income monthly (24% annually). I'm sure I'll double my money in 3-4 years.