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I have $2,000 sitting in a savings account doing nothing....

7

777php

Diamond Member
I have a main savings account so I still have money for a rainy day.

I would like to either place this in a CD, bonds, or a mutual fund, something that I don't have to constantly monitor like stocks.

Does anyone have any other recommendations, something medium growth over the next two to three years?

If you have any mutual fund suggestions let me know also. Thanks guys.
 
with $2k I'd just get a CD or put it in a Money Market account. If this is your rainy day/ emergency fund you need quick access to it.
 
Originally posted by: Amorphus
mutual funds and biotech. at least, I'm pretty sure biotech is doing very well. 🙂
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Depends... We keep announcing good news and our stock keeps going down.
rolleye.gif
 
I don't want to touch it for a few years, I have ememrgency money in my other savings account. I figure not being able to touch it for a while enables it to be in the higher growth category.
 
Call clark Howard. Some woman called in asking the same question, and he didn't suggest doing anything with it. He said that the amount you're going to amass over 2 to 3 years will not be that much (he didn't suggest putting the money anywhere where it could lose it's value, due the the unstable economy). 😕
 
Originally posted by: bunker
with $2k I'd just get a CD or put it in a Money Market account. If this is your rainy day/ emergency fund you need quick access to it.
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I agree. $2K isn't enough unless you want to play. But that's if you have $10 already saved. CD would be the best. Maybe a 6 month or a year. Or better yet you can take the minimum the bank allows and put that into a 6 month, then the rest into a year. Once the 6 month is up, roll that back into another 6 month and so on. That way you always have a CD maturing every 6 months if you need it.
 
2-3 years is quite a long time and of course my suggestion probably isnt the best. If I had that much money I would do a few things:

Depending on how accesible this money needs to be I would first invest some of it in an IRA. If you don't really need the money for a while until retirement consider helping yourself out. Even if you have a 401k this might still be a great option to look out for your future. The returns are generally great, and depending on how much time you have until you hit that age you might want to consider different risk options.

If this money needs to be highly accesible consider a a short term cd's. Right now CD rates are pretty pathetic, maybe 2.5% max is what you are going to get, and I wouldn't want to keep it in a CD where the rates may go up in a half year to a year. If it does and you aren't given a bump certificate than you might not be able to upgrade to the new rates. These rates are pretty much the rock bottom I would suppose for a while now.

Another option which is pretty safe is looking at investing a lot of that money into an index fund. Research on the different ones that are available right now ( I woul dsuggest Vanguard), and see what options you can get.

However I am just a college student (freshman at that) and this is all very basic information. I enjoy investing but I know that im VERY amateur at it. Hopefully this advice can get you started in the right direction, if not, I apologize!

Good luck!
 
Originally posted by: TMPadmin
Originally posted by: bunker
with $2k I'd just get a CD or put it in a Money Market account. If this is your rainy day/ emergency fund you need quick access to it.
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I agree. $2K isn't enough unless you want to play. But that's if you have $10 already saved. CD would be the best. Maybe a 6 month or a year. Or better yet you can take the minimum the bank allows and put that into a 6 month, then the rest into a year. Once the 6 month is up, roll that back into another 6 month and so on. That way you always have a CD maturing every 6 months if you need it.
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I would agree with this ladder approach, except I think he beleives he will need it in about 3 years, not any earlier. So I would say, put it into a 3 year CD, your return will be a little greater.
 
I-bonds are great ... 4.66% return, min 1 year hold (although if you cash out before 5 years you get a 3 month interest penalty) ... still, even with the penalty its a very attractive return in comparison to current CD rates.
 
Originally posted by: mcoski
2-3 years is quite a long time and of course my suggestion probably isnt the best. If I had that much money I would do a few things:

Depending on how accesible this money needs to be I would first invest some of it in an IRA. If you don't really need the money for a while until retirement consider helping yourself out. Even if you have a 401k this might still be a great option to look out for your future. The returns are generally great, and depending on how much time you have until you hit that age you might want to consider different risk options.
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Saying returns on an IRA are generally great is speculation, at best. It all depends on how the money is invested in the IRA, just like everything else. Since he needs the money in a couple of years, this is not a viable option, as he will get smeared with interest and penalties.

 
Holy crap, if you look at the Vanguard short term funds, almost all the 3 year investments are in the negative.
 
I had couple grand lying around back when I was in school and I bought cisco stocks. I was in loss column for 6-8 months but I am doing pretty good. Given the I was only able to get 100 something share for that much money but still gains will be more than any money market account.

I should have bought microshaft back when they were at 23 after the split not they are up to $28 in less than 6 months.

So may be you should wait and see if the stock market is having a bad day and then buy some bigname company that you know will be around for little while.
 
These are the funds that Vanguard have to offer fund lists. Any of these looks promising. I'm guessing the key columns for me are yield, 5 year, and growth since inception.

I'm trying to stay away from stocks since I have a good amount of money already invested in several companies.
 
Originally posted by: jdogg
I-bonds are great ... 4.66% return, min 1 year hold (although if you cash out before 5 years you get a 3 month interest penalty) ... still, even with the penalty its a very attractive return in comparison to current CD rates.
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Where'd you get that return? I bonds, like most bonds are around the 2.5% yield rate on a 3 year note.
 
Originally posted by: CPA
Originally posted by: jdogg
I-bonds are great ... 4.66% return, min 1 year hold (although if you cash out before 5 years you get a 3 month interest penalty) ... still, even with the penalty its a very attractive return in comparison to current CD rates.
Click to expand...

Where'd you get that return? I bonds, like most bonds are around the 2.5% yield rate on a 3 year note.
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WOW. With $2000, that would be $50/year. I'd definitely wait 3 years to earn $150.

Go buy a big screen TV.

 
$2000 that you want access to in a couple of years?

Option 1 - get a CD- very low risk, not very liquid, will just beat inflation
Option 2 - put it into a fund - high risk since will fees etc you will be in the whole at the start... may or may not be liquid
Option 3 - Buy a high dividend paying blue chip - medium risk, good return, tax efficient, pretty liquid
examples: CNP, UST, CI, BMS
 
Originally posted by: 777php
These are the funds that Vanguard have to offer fund lists. Any of these looks promising. I'm guessing the key columns for me are yield, 5 year, and growth since inception.
Click to expand...

One of the most important things you'll ever learn in investing is: Past performance is no indicator of future returns. While historical performance gives you a good idea of what the investment is capable of, it's all history and you nor anybody knows what tomorrow and the years after will bring.

That being said, Vanguard is one of the best mutual fund companies out there. All my long-term investments are there. A really important thing to pay attention to when choosing a fund is the expense ratio, which is basically overhead costs of running the fund (paying the people that manage it, processing paperwork, etc). Vanguard funds are known to have some of the lowest expense ratios in the industry. And avoid any funds that have loads.

For a 2 - 3 year time horizon, stocks would not be a good idea as they are too risky for such a short window. You should probably stick to cash instruments like CDs or invest in a short-term bond fund or I-Bonds.

BTW, if you really want to learn about investing, you should check out MorningStar.com. They have lots of helpful information there.

Good luck. 🙂
 
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