I have $4,000, what is the best way to invest it?

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tom bailey my occupation is none of your concern (most likey more fulfilling than yours) I dont know you and I dont care about what happens to you. The 4,000 is a gift from a deceased family member , I dont need it thats why I would like to invest it (long term).

This is a though question. First set your goal due to your age and need. If you want to invest in safe I would recommend you to invest in unit trust,

It depends on a few things, the primary ones being: when will you need the money? and what is your tolerance for risk?

If you need the money in 2 or 3 years, such as to buy a car or to pay for college, then that would suggest a much more conservative investment. But if you are young, and this is to be used to fund your retirement a few decades from now, then that presents a much broader range of likely possibilities.

There is no one "best" way for everybody - it depends on your situation.

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

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. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.
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.

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.
Sources:
http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site.)

529 plans: http://www.savingforcollege.com

I would put around $1,000 into an emergency fund like an online high yield savings account or money market. Then, put the other $3,000 towards a Roth IRA to start to build your retirement. Earnings grow tax-free and can be withdrawn tax-free pending you've owned it for 5 taxable years, and are at least 59.5.

ultimately depends on your age.
the older you are the the less risky you want the investment to be. if you are quite young then you can afford to be more risky.

as a general rule a mutual fund is pretty safe bet.
if you have any high interest debt (ie credit cards) you should pay that off first.

Read about investing first. Then you will be able to match up your asset allocation with your time horizon.

- Mutual Funds for Dummies, by Eric Tyson. Best investment book out there.

- The Boglehead's Guide to Investing

- My free book at http://www.invest-for-retirement.com . Don't read it, though. It's long-winded and it sucks.

Hi there,

With this small amount of money, I would put it into a retirement plan if you don't already have one. Contribute 10% of your income to it and watch it grow. Make sure you use a diversified portfolio of mutual funds. You wouldn't want to buy any stocks at this time because with this small amount of money you would most likely get only a few stocks from any company worth buying in to.

Or

You could conservatively invest it into something such as a CD in the US, GIC in Canada or money market mutual fund. (make sure the interest beats inflation) Continue to contribute to it so that one day you can purchase your very own investment property that produces positive cash flow each month.

Depending on your current situation, this wouldn't be the first step of financial planning. I would recommend if you don't have any retirement (pay yourself first) savings or if you currently have debt, then to start with one of these first before buying into real estate.

Hope this helps,

Stephen M. Coon

Low risk mutual fund with placements in CD's or Treasury Bills.Yields higher than a CD and is a relatively safe place to put your money. Unlike CD's its not blocked for 3,6 9 mnths etc...It can be liquidated at anytime.

Your question cannot be answered authoritatively without you providing some additional information to me. The main question I have is what would you like to save and invest for? Please try and be as specific as you can. Please send me an email and read my profile. Thank you.

Invest in yourself to get a better occupation.

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