What should I invest in??
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Answer:
Call Smith-Barney. They have investment plans that are awesome. The mutual funds can make you a lot of money. I use them for investment advise and they really do a great job.
If you'd like to get more bang for your buck then don't put it in a traditional bank like you mentioned. Go with an online account like ingdirect.com or emigrantdirect.com because they pay close to 5% interest versus the 1-2% at a traditional bank. I would not do a CD because they would pay you the same or less as the accounts I mentioned above but they hold your money for a period of time and you can't touch it. Finally, pick up the latest copy of Money magazine which has a good article on where to invest now.
Take a look at vanguard they have a good money market account. If you want to use it for college and you have over 10k try opening a 529.
Well, it all depends on the timetable. I am guessing that you are fairly young and since it is for college and you were driving you probably only have a 2 year window at most before you'll be using the money. In this case, your best bet right now would be as someone previously mentioned, to use an online savings account, these accounts are free and are currently earning around 5%. HSBC and INGDirect are both good choices for this. To lock in the rate, you could go for a 12 month CD with either of these banks which will put you at around 5.3% which is pretty good.
The problem with starting a mutual fund or investing in stocks is your time window. You're right in that the market can fluctuate a great deal, yet over time it trends upward. By placing your money in for a short time you might bear the brunt of a downward swing and not have the time to make it up. This type of investing should generally be used if you plan to lock up the money for 7+ years.
The worst thing you can do is contact a full-commission broker like one person suggested. They will eat your money alive before it ever starts earning. Vanguard, www.vanguard.com, is a great company (its actually a co-op, which works in your favor) and has very low fees for all of its products. They can manage mutual funds for you, but the other suggestion I was going to make, was a Roth-IRA, which vanguard also manages. A Roth is a retirement account that grows tax free overtime. At your age, even putting $1,500 in a Roth and letting it sit, it will compound and compound into a small fortune by the time you retire. You'll have to read more on Roth's elsewhere.
If you really want to give it a go in the stock market, check out www.sharebuilder.com and invest in some ETF's. ETF's are like mutual funds in that they spread your money between hundreds of companies in a particular sector. This reduces risk and they have lower expenses than traditional mutual funds (also no minimum balance).
In all though, your best bet would be internet savings account, which can be opened in minutes, and CD's, based on what limited goals you've told me. But, I would highly recommend getting a Roth started to anyone reading this. Why work so hard to store for retirement later when that money can grow through college and work for you all that time? Good luck. Don't trust everything you read here, buy a simple investment book or look around online for legitimate resources on investing.
If you are VERY nervous about "investing", consider a savings account, such as Citibank Savings, which currently pays a whopping 5%, that ain't bad! :)
https://web.da-us.citibank.com/cgi-bin/c...
If you want to stick your toe in the water and try investing, maybe a mutual fund is for you, I suggest AIM or American Century (SEE: http://www.aiminvestments.com OR http://www.americancentury.com )
If you are young, and can stomach the stock market LONG TERM, I STRONGLY suggest using ShareBuilder.com to invest in the stocks YOU want to, and re-invest your dividends there to, but you must research your own picks, then invest however much you want when you want.
Overall, buying stocks when chosen wisely, will yield the most long term, but DO your research first, and don't jump on the first thing you see, shop around, but most importantly, have fun! :)
Good luck! :)
CASH IS KING
Put your money in a Money Market . Call five banks tell them how much you have to put in a money market. Then ask them what is the return monthly on it?
Also check two to three banks on line like HSBC, Em Direct something like that and Etrade for their returns also.
Tip if you have a car loan or a mortgage look to pay them off asap. Then the sooner they get paid off less bills and more cash to invest.
Example
If you have a loan say 6%
And a investment with 3% return.
Your investment is not doing any good because you are -3%
after you have say $10,000 in a saving like Money Market and you know it can be invested for five years or long. then look to invest in a good ETF in the stock market and understand you may need to adjust it monthly or 1/4 as the sector your in becomes weeker. RULE always have tight stop on every stock
That "someone" should not be listened to nor should whoever told you about the stock market. There is always something to buy in the Stock Market. Real Estate Trusts; gold; foreign countries; oil. Can cover any scenario there. The market was 700 when I came in in 1980. 12,300 now. You are guranteed to lose purchasing power in a bank acct after inflation & taxes. 4% cd less 25% taxes is 3%. Inflation 3.5% - you lose purchasing power. With college tuition rising 7-10% a yr it is even worse for you to waste money. Don't do it. ADX + PEO - solid closed end funds that sell at a discount. Buy them at schwab.com or wherever. You aren't saving at all if putting in bank.
go to your local bank as ask to speak to their investment broker. explain your situation to them and they will help you. you should invest a big chunk of money in to a 529 college savings plan if you plan to go to college. nothing wrong with being conservative and investing in a good balanced mutual fund, may make you 8 to 10% a year, small chance of losing money. also nothing wrong with buying some CD's from your bank, no risk of losing but you will not make lots of money. great time for you to buy some books on investing, like investing for dummies, to learn about investing. never invest in something that you don't understand or something that guarantees that you will make a lot of money, remember the stock market averages gains of around 10% a year, some year better, like this year, and some years you will lose money. most of investing is common sense, so if you don't know what you are doing, find someone that you trust and pick their brain. ask one of your neighbors who they use for their investments. can't go wrong with a guy at your local bank. send me an email if I can help more. I used to be a Stock Broker.
Here's something to help you:
http://financialbasics.blogspot.com/2006...
Good Luck
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