HOW WOULD YOU INVEST $5000 IN STOCKS? SHORT TERM – 2 YEARS?

what company? would we go tall risk or low risk? how can I get the limit distinction for my reduced tenure investment?
obviously I’m receiving the time to do which right away Yarcofin—maybe we do not know what we have been doing

{ 5 comments… read them below or add one }

cvawt November 7, 2010 at 10:59 pm

I would recommend opening an Etrade or Scottrade account and putting it into a low cost index fund. Or consider putting it into a precious metals mutual fund.

For that amount of money buying only one company or even two or three is quite risky. You are better off trying to get a broad piece of the market with mutual/index funds.

Yarcofin November 7, 2010 at 11:52 pm

2 years is not “short term”
and $5,00 is not enough to have a diversified portfolio. That’s enough for 1 or maybe 2 stocks. More than that and the commissions will eat you alive.

If you have to ask people on Yahoo for “hot stock tips”, you should NOT be investing in the stock market because it’s obvious that you have no idea what you are doing, and you will probably lose it all.

Either spend a few hours and learn how to invest yourself, or just put your money in a mutual fund and forget about it.

If you insist on an answer….
Put 100% of your money into high-risk stocks if you are young because you have nothing to lose, take less risk if you are older and retiring within 10-20 years.

Buy
GOOG
V
FXI
CA:PNP
CA:BBD.B
CA:NCX

I am not an expert, consider risks before investing, not responsible when you lose all your money, blah blah blah.

gosh137 November 8, 2010 at 12:37 am

Two years is considered “short term.” Remember the tech stock bubble that burst in March 2000? It took until November 2007 for the S&P 500 to get back to its previous 2000 high. So to invest in stocks for only 2 years is high risk. A bank CD is low risk. Go to http://www.bankrate.com for the highest CD rates offered in the nation.
For the high risk option, go with stocks. As to which ones, only you can tell what you feel comfortable with. Invest in what you know.

blackbimmer1972 November 8, 2010 at 1:16 am

Unfortunately, you can’t count on getting a huge amount of profit on 2-year investment periods.

It’s true that higher-risk investments typically yield better returns, but only over time. That’s why younger people are always encouraged to take on growth-stock investments that tend to harbor the most risk (because they’re in the market “for the long haul”), and then they’re supposed to switch-over to more conservative investment vehicles as they get closer to “retirement age.” If you’re not going to be in the market long-term, then you’re better off not taking on a lot of risk. You really are about as well off to go out and buy an exhorbitant number of lottery tickets.

In a practical sense, what you’re talking about actually gets into “daytrading,” which requires you to plant yourself and closely watch the market pretty often – like several hours per week or even per day, depending on the stocks and the circumstances. It’s a lot of work, and unless you know what you’re doing it’s very, very dangerous (a.k.a. “risky”).

Typically, people should only invest in the stock market via mutual funds (as opposed to individual stocks), and the shortest term should probably be about 5 years at the absolute minimum. When people choose funds to invest in, they’re basically looking at a fund’s track record over the past 5, 10, 20, and even 30 year periods.

A better short-term investment in your case would probably be a 24-month CD (certificate of deposit).

Bulls Bear and Pigs November 8, 2010 at 1:24 am

Short-term is not 2 years. Day trading = in today/out today, swing trading=in today/out in more than one day.,buy and hold is for long term 1-1/2 years or more. you would be a buy and hold. Go find a nice fund and let the pro. pick the stock or go to TFALiving.com and Learn how to trade for your self.

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