Where is your money invested?

[Martin]

My mom has a few grand sitting in a bank earning 2.25%. Surely there's something better out there? Where do you guys have your money? what's the risk and interest rate?

 

[jagec]

I mortgaged my house to invest in Alex Chiu's immortality rings. Suckers, I'll be rich in a few years! HAHAHAHA!!!

 

[DaveSimmons]

You're probably not going to do better with a known return except with a multi-year CD at INGDirect.

I have a fair amount of money in mutual funds like VFINX, but there is no way to know what the return will be in any given year. My short-term cash (a few months living expenses) is just in savings like your mom.

 

[arcas]

High return and low risk are generally mutually exclusive. If you know you won't need the money for 12-18 months, a CD is probably your best bet. A money market account should also offer somewhat better returns than a savings account but again, the rate of return depends on the amount of risk you're willing to take. Money market funds which invest only in US Treasury Bonds are quite safe but they're only marginally better than a savings account. Those based on municipal or corporate bonds are somewhat less safe but offer better returns. It all comes down to your tolerance for risk.

 

[Svnla]

Higher rate of return = higher risk

From lowest return to highest: saving, CD, money market, bonds, blue chip stock, penny stock

 

[GTaudiophile]

I have a diverse portfolio:

Cash savings
Individual stocks
Stock funds
Bond funds
Money market funds
Metals: Platinum, gold, silver

Different investments yield different returns at different times, hence the importance of diversity. Last year I did really well with my stocks, making as high as 80% return on my AirTran stock that year. This year my metal stocks, platinum especially, have done pretty well, enough to offset any losses elsewhere. And then there are my money market and bond funds which just always grow slowly and steadily.

 

[GTaudiophile]

I should add, if you're researching mutual funds, check out MorningStar. They make it easy to find something with good return and low risk.

An example of one of my so-so funds.