What is the best way to invest money to save short term (say 1 1/2 years) to maximize your profit?

If you will be adding to this amount monthly and begin with $2,500. Also need the option to add additional money monthly.

When you are talking such a short term, most investments carry a great deal of risk. There are many random events that can effect investments over that period of time. The fact that you wish to add to it monthly also precludes certain investments. You did not mention the amount of risk you are willing to take. That is an important consideration. If your risk is extremely low, you should invest in a money market fund. Among the higher yield of these and the higher risk are loan participation funds. FFRHX is one. It has a $2,500 minimum investment and additions of $250. Current yield is a little over 6%.

Of a somewhat more risky nature but still of only moderate risk is a fund such as FSDIX. It has returned about 13% annually during the last 3 years. It has the same minimums as the previous fund.

Both can be purchased from Fidelity by visiting their web site.

http://personal.fidelity.com/products/fu...

Of more risk and also potentially greater return is PENNX. The fund has an annual return over the last 3 years of 15.8% but in 1990 did suffer a loss of 12% and in 2002 a loss of 9%. By mutual fund standards those losses were rather insignificant. Minimum initial investment is $2000 and subsequent investments are $50. You can purchase the fund through Royce Funds on the internet. Royce Funds also has other funds that are of similar quality. But there is the possibility of suffering a loss over such a short period of time.

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Congratulations on getting into saving and investing. Saving on a monthly basis is a great way to save for retirement. If you are investing a small amount each month, you might want to look at a no-transaction-fee mutual fund. Scottrade offers a whole bunch of them. A s&p 500 indexed fund is a good choice.

Money market fund.