Raindrops On Roses 8806
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It depends on what you feel comfortable with. I know the stock market fairly well, and knew it enough to feel all-right about a year ago when I started. That's where I believe is the best chance of making money.
The stock market has the highest risk, but it is the area in which you can make the most possible money. If you're willing to accept the risk that the entire market could crash (in the worst case scenario) and you could lose the principal (your $1,000), then you're ready to look into investing. If you plan to invest, go to http://www.sharebuilder.com and activate an account; don't begin investing until you learn more, however. Take their 6 part tutorial. Read everything on http://money.msn.com about investing, from stocks to ETFs and commodoties; read Jubak's journal and his picks. There's also a really important column on starting investing with $100, which also applies to higher amounts and could help you a lot; (it relies entirely on ETFs, however, so also look into stocks and commodoties). Research the stocks you feel interested in and buy them through sharebuilder, trying to keep your portfolio as balanced as possible. Also, the spare change in your sharebuilder account builds interest (it's a money-market account), so you're still earning money even when you're not investing. This type of investing (stocks, etc.) will earn you the most money of the four options I present here.
A mutual fund will get the next-largest profit, with a relatively low risk. The rates vary from bank to bank, but your bank will probably be competitive and offer you a good rate to keep the money with them. You will get a better rate the longer you let them hold the money, but don't hold off for great profits from $1000. You'll earn less than $100 per year, and I guarantee that.
The lowest profit/highest risk combination is to open a savings account that you can't touch. An ING Orange Savings account is generally the best rate around, and it takes 3-4 days for a bank transfer so you're not likely to dip into it. This holds NO risk until you have $100,000, but you won't have that much money before you die, so don't expect to make much.
There is one more option, and that is Savings bonds. Series EE bonds (Patriot Bonds at the moment) are good investments that you can buy at your bank. You buy them at half the face value, so you could purchase twenty $50 savings bonds. They, however take $17 years to completely mature, though they are gaining interest all the time. They will come back to face value at the same time, between 5 and 8 years, and in 17 years you will have much more than you started with. This option, however requires patience and forgetting about your money, so I don't recommend it unless you have those two virtues :D.
Overall the situation is dependent on how much risk you can tolerate. If you feel that you can spare the money and it's not extremely important if you lose it, then go with investing it. If you're extremely prudish and hate losing even a penny you might want to go with a savings account. I'd go with what you feel comfortable with, but if you want to make money you have to take a risk. You could even go with a combination of the above options, splitting your money among different avenues. Consider it wisely and then choose. All you have to lose is $1,000, and it's not really that much in the long run. Good luck! |
dredude52
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There is no one answer. It depends on many things, but mostly your preferences.
There can be no great success in trading (life) without great commitment, hard work, discipline, and the realization of the “right” type of thinking.
Buy a nice safe CD until you learn something.
Read vociferously.
"Which Is Better, Buy-and-Hold or Market Timing?"
"Do You Have What It Takes to Be a Market Timer
The Beginner's Bible in Technical Analysis is:
Edwards & McGee"Tech. Anal. Of Stock Trends"
Schwager, JackStock Market Wizards
Wasendorf, RussellAll About Futures
Lefevre, EdwinReminiscences of a Stock Operator
This last one is an excellent novel about the most famous trader in history: Jesse Livermore. He made hundreds of millions in the Thirties and Forties. Oh, and what they don't tell you in the book --what many people don't realize -- he died broke. |
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