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Question: What are good investments?

(Posted by: Jules955 on 2010-09-08 07:16:19)

What kind of investment would you make with One hundred thousand dollars...

Posted by: Joe on 2010-09-08, 08:23:43

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. However, some young people will go all stocks, and some very conservative people will go all money markets. 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 that will diversify for you. 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. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be good all-in-one stock and bond funds for an IRA. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion. Buying a house instead of renting will save you a lot of money in the long run. You don't have to pay rent and you build equity in your house instead. Buying rental property can be a good investment for some people. However, being a landlord can be hard work, and many people are not good at it. If you don't know how to handle deadbeat renters, you can have trouble. 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. I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don't work. Particularly bad are people that teach "technical analysis " systems that sound impressive, but don't work. 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.

Posted by: bhram on 2010-09-08, 07:19:23

If you want that much money you must trade aggresively in stock market.

Posted by: Rick B on 2010-09-08, 07:20:52

No idea. that depends on the goal for the money, the time frame, your ability to tollerate risk, etc. No single investment is right for all situations. Generally, I would invest in quality stock mutual funds if I had 5 years or more to let the money grow, and if I could tollerate risk. The type of stocks would depend on my risk level and time window. If I needed the money in the next 3 to 5 years I might do CDs or money market funds. If I needed the money earlier, I would do a money market or savings account.

Posted by: John M on 2010-09-08, 07:26:57

In order to recommend an investment, any credible adviser will want to know what your goals are. They'll also ask about the amount of time you are willing to wait for a return on your investment, and get some awareness of your risk tolerance. If you get advice from someone who doesn't ask those questions first, then I would strongly advise that you look for a different adviser. So, if you are young and your goal is to be able to retire when you are 55, you have lots of time for the investment to grow and to weather the ups and downs. You'll want to invest in a mutual fund that is the right mix of risk and return for your temperament. If you want your $100,000 to turn into $500,000 as fast as possible, and you are willing to risk it all to make it happen, then you might try to invest in 4 different growth opportunities, on the theory that 2 of them will pan out well and you can cut bait on the other 2 before you lose the whole $50,000 on those two. This takes a lot more effort and a different temperament than the first example. If you are 30 and you want to invest in a particular kind of business by the time you are 40 and you need $200,000 by then, you have a different set of challenges. You can invest agressively for the first 5 years, but if you are close to your goal at that time, then you may need to shift gears into more conservative investments to preserve the gains you realized as we come out of the great depression (assuming we do). There are lots more scenarios, hopefully you get the idea. Match your strategy to the thing you want to do with the money at the end of the investment period. Always balance your portfolio for the level of risk you will accept, but do not over diversify if you are looking to "beat the market ".

Posted by: samy on 2010-09-08, 07:30:06

For another 5 years without doubt invest in GOLD ETF in SIP. If you can ,then the all time best,in LAND.

Posted by: Rj on 2010-09-08, 07:30:27

Since housing has pretty much bottemed out you might try buying newer note on recent purchases of property. You can buy the first five years of say a $30,000 note 60 monthas of a 120 month contract for 7-9 thousand at $312 per month- well do the math; over twenty percent. if note is first position and under half the recent value. Worst case scenario is you get a thirty thousand dollar house.

Posted by: fladabosco on 2010-09-08, 07:30:58

Good investments are ones that fill your investment needs in terms of risk, return and length of time the investment is held. If you are young, a mix of no-load mutual funds that diversifies you across sectors, countries and risk should be the majority of your holdings. As you get older you reduce the risk. A common formula is to use your age as a guide like this: 20 years old: 80 percent stocks and 20 percent bonds and cash equivalents 30 years old: 70 percent stocks and 20 percent bonds and cash equivalents You get the idea. If you are looking for advice on individual stocks, funds or ETFs to buy, then you have to do a lot more information than you are going to get with one question. But since you asked, and I am a sporting man, I'll give you three ideas: Super risky: Leveraged emerging markets ETFs. I think the next two years will be good for them, but they are really volatile. Not so risky: No load S &P 500 mutual funds: Long term the US economy will come back to healthy growth. If you can stomach the roller coaster for a while it will pay off. Even less risky: SDY, the S &P 500 ETF. Right now it pays 3.75 percent in dividends too! Individual stocks: Super risky: Akeena Solar. A penny stock and local to me. A growing installer and producer of solar energy systems. Recently partnered up with Westinghouse. Risky: Annaly Capital Management, a REIT. It pays a whopping 15 percent dividend and if keeps paying it the price of the stock will have to climb. Kind of risky: Bank of America preferred stocks. The preferred stocks pay high fixed dividends. I own several and if the price of the security drops I buy more. Not as risky: Caterpillar. As the world economy rebounds it will need more farm and construction equipment, especially after several years of downturn has pent up demand. DISCLAIMER: I buy and sell these stocks for my personal accounts.

Posted by: swoopsterj on 2010-09-08, 07:43:57

If I had that much right now to invest I would put in into Gold and Silver. Very Very little into stocks and bonds. Then cash some of my earnings when the market starts picking back up.