Where I should invest the money?

I have about $20,000 at hand without a good way to put into, and how I can invest this money to generate some returns. Should I buy CD? Bond? etc... if any, which one offers best return,

What baout Stock Market, I know 20,000 can't buy many stocks, and there is tax associated with investing in stock market even you don't gain anything later on, correct?

Thanks a lot

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. The links below have on-line questionnaires which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of investment.

You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.5%.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:
(all links are to non-profit groups or to Yahoo sites. None are solicitation)
http://finance.yahoo.com/education/begin...
http://finance.yahoo.com/funds/basics
http://www.vanguard.com/VGApp/hnw/planni...
http://sec.gov/investor/pubs/assetalloca...

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this.
https://personal.vanguard.com/VGApp/hnw/...
https://ais2.tiaa-cref.org/cgi-bin/WebOb...

$20,000 is enough for a great starter portfolio, however you need to speak with a broker to see what kind of diversification is right for you (they will assess you risk and take into account your age etc.)

Do you also have an emergency fund set-up?
Do you have as much debt as possible paid off?
If you answered no to either of those questions, take a step
back and take care of those things first.

Congrats on getting that much saved, that is a great accomplishment.

Do you have any retirement accounts?

Why not open a Roth IRA.

I like the answer above (pay debts first, talk to a broker), the only thing I'd add - and a broker will tell you this too - is DIVERSIFY. You should be able to put some of that money into the stock market (maybe buy some shares in a mutual fund, that's always a good way to ensure you're getting a mix of investments) but you'll also want to consider investing a little in precious metals, commodity funds, maybe even currency speculation (atlhough that is definitely not a field for amateurs - you hear the words "Iraqi dinar" and just run like hell, don't look back).

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Invest your money with a long-term plan.

Your first option should be to fund fully a retirement account. This is always a good investment regardless of who you are.

If you have done this, or you wish to wait on the retirement fund, then one of the best things you can do is open a DRIP Plan.

They are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street.

The best part is you get to choose from the best Blue Chip International Corporations in the world. You can have Toyota, General Electric, Royal Canadian Bank or McDonalds in your portfolio. Although there is always risk in stocks, these Blue Chip giants offer far less risk than most.

They are inexpensive to start and maintain, and your dividends are reinvested for free.

They are perfect for small investors, as well as big investors. They will allow you to sleep at night and not care about whether the market is going up or down.

Best of Luck

Lock your money into a short term CD 6 months or so.. and in that Six month read books on investing.. paper trade... WHAT not to do is ask for advise on message boards .. ask brokers, (Brokers make you broker... most are paid to sell you stocks that are being touted within the ranks of brokerage companies). Never buy Penny stocks, buy stocks that have a veiwable balance sheets and have income

Do as much DD as possible. never put all your eggs in one basket.

paper trading helped me out alot i paper traded for a good 6 months before making my first trade.

goodluck

Stocks are a great investment, if you know what your doing and if you do your research you will be fine, I am cheating at the moment getting my stocks from a specialist website that does very well in finding the stocks that are on the way up.

how about a cd until you read a book or two about investing...........it is your money.....worked hard to get it..............study and the money will work hard for you.....

You can open an free Marketiva forex \gold\fund\indexs online trading account , with $5 reward and $20000 virtrual fund for practice .Just click the following link to open an account.
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