stock, c.d., money market? Let me make some assumptions, since you give a very open, non-specific question.
1) you are married since you say "we"
2) you are in your 20s
3) you have not funded your IRA and do not have a 401K at work
4) you have not invested previously and do not have a job that has a pension plan.
5) you are not over-your-head in debt and are living within your means.
If most of those are correct, I am going to recommend the following:
1) You open a Roth IRA at a discount broker like E-trade, Scottrade, or others. I like Scottrade because they have local offices, but they don't have much research.
2) Do your research at Yahoo Finance on good mutual funds that have good 5 and 10 year track records.
3) Inside of your IRA I would buy some good Mutual Funds. I would look at Mid Cap and Small Cap Growth funds. You can buy most of them through your discount broker. Sometimes that is a litte more expensive than buying them directly, but you can move your money around more easily.
4) Start reading in Smartmoney.com, Yahoo Finance, DaveRamsey.com, Crown.org about IRA investing, mutual funds and overall money management.
5) Given a young age, I would start putting a $100/month into your IRA and build it to 10 to 15% of your income. You will be capped at $4,000 per person, so $8,000 for you and your spouse. If you do this, you will retire wealthy.
6) Start learning and growing, don't wait. An hour a week of reading and you will be far ahead of most people.
7) Your goal, in the next 5 years, is to have 10% of your money in a Capital Appreciation mutual fund, 30% in Small cap growth fund, 20% in Mid Cap Growth Fund, 20% in a Large Cap Growth or Value Fund, and 20% in an International Fund. You could reduce each of these a small percentage and put 10% in a REIT Fund. Look these terms up and become familar with why I would recommend this.
8) If you do have a 401(k) at work, fund it to the max that the company matches, then put the rest in a Roth IRA.
P.S. If you earn over $150,000 per year, go find a fee only financial advisor and ignore what I said above. To do so, go talk to some individuals that make or $300,000 per year and ask them who they use. Ask several persons, evaluate and check out recommendations.
P.P.S. Do not buy annunities under any condition, unless the mofia is threating to kill you. Do not listen to the promises of an annuity salesperson. You can do it all and more inside a well organized thoughtful Roth IRA. This is like asking
"I am human what sport should I play?"
What is your time horizon, tolerance for risk, objectives etc etc etc.
If you don't need the money in the near future and are planning for retirement; A Roth IRA might be a good place to start.
If you are looking for short term and don't want any risk to principal than CD or MMA. send it to me!!! ill hook you up Depends on how risky you want to be.
I've recently invested $4000. Because I am a moderate investor, I invested $2000 in mutual funds and the other $2000 in stocks and ETF's. Mutual funds are less risky and are generally slow growing investments. ETF's are a collection of stocks in a certain sector (such as energy or banks) and adds some degree of stability but can still be risky if a particular sector takes a dip (i.e. if the price of oil drops fast, then the entire sector shares will probably fall too). Stock are the most risky, but can potentially give you the fastest increase (or decrease) in value.
So, the best advice (I think) is to diversify over a range of different investments. ETFs. I would visit Vanguard.com because they are one of the most respected places to learn about mutual funds, index funds, and ETF's.
In my opinion $3,000 dollars is not enough money to try to invest in "individual stocks" you won't be able to diversify enough with only $3,000 dollars.
I think an index fund is your best bet for starters, and $3,000 dollars is usually the minimum for a "quality fund."
Something a little more simple and safe is simply a high yield online savings account from Emigrant Direct at 5.05% or ING Direct at 4.5%. The way the markets are right now you may want to start there for the next couple months. |
