How can I invest $5000 dollars for a quick return?

If you're like most people who are looking into investing money, it probably feels intimidating. After all, there is so much information out there about how to pick individual investments. How does one know where to start? What if someone steals my password or account info? Is this really safe? These questions may feel overwhelming at first but we'll walk through some of the basics that will help get you started.  Let's take a look at what works well when putting together an investment plan using just $5000 of cash.

The first thing to consider is whether investing is right for you. This article assumes that you have already decided to make the jump from saving towards long-term growth and aren't interested in day trading or short term gains. If not, check out these articles explaining why you should be thinking more seriously about investing as part of your retirement planning. Investing isn't necessarily easy (and neither is picking good funds) but it certainly has its advantages -- especially over letting your money sit idle while inflation eats away at the value of your savings.

Once you've made up your mind, let's talk about finding a reliable company with solid track record to manage your money. We recommend Fidelity Investments because they offer great products without charging high fees. They also provide access to research reports, educational materials, and live chats with experts whenever you need them. The bottom line here is that you want a fund provider who takes their job seriously. It makes sense to do business with companies who are committed to keeping investors informed and educated. For example, Vanguard focuses heavily on providing free resources such as quarterly newsletters, videos, webinars, etc., but doesn't charge any annual management fee. Here are some other things to keep in mind before you begin building your own personal portfolio.

What's the best way to invest 5000 dollars?

When choosing which type of mutual fund to use, you'll want to think about three key factors: diversification, cost, and performance. As far as diversification goes, a broad range of different asset classes is important since no single sector stands alone against market fluctuations. Some examples include large cap stock funds, small caps, international equities, bonds, commodities, real estate, natural resource funds and hedge funds. You might even choose to put your money into a target date fund. Target date funds invest according to a specific age bracket, offering better guarantees than traditional funds since you won't lose any portion of your balance early due to withdrawals. Finally, don't forget annuities! Annuity providers usually guarantee income payments until death or until maturity respectively. While annuities tend to carry higher expenses than mutual funds, they often come equipped with features like guaranteed minimum earnings, surrender charges, and tax deferral benefits. In general, though, annuities are designed to pay fixed incomes rather than fluctuating ones like mutual funds. So, if you prefer a steady stream of income, annuities could be worth considering.

Costs matter too. Mutual funds typically fall somewhere between 1% - 2%. However, costs vary greatly depending upon which particular fund you go with. Fees related to marketing and distribution can eat up as much as 5% or 6%, whereas those associated with administrative tasks are generally less than 0.25%. Keep an eye out for sales charges, commissions, deferred sales charges, and redemption penalties. Don't assume that low expense ratios mean lower risks and vice versa. There are plenty of cheap funds available but they may require sacrificing liquidity and/or potential upside. Also, remember that many newer funds haven't had time yet to beat competitors' benchmarks by significant margins. Lastly, try to avoid "buy and hold" index funds since they only mimic the overall performance of a broader market instead of reflecting the merits of each individual security within the index itself.

Performance matters! When evaluating past years' results, examine five-, ten-, and fifteen year periods. Look for funds with strong records during recessions, bear markets, and bull markets alike. Remember that past performance does NOT predict future results. Just because something performed well last year doesn't automatically mean that it will continue to perform equally well next year, unless proven otherwise. And yes, evaluate funds' yearly performances along with their corresponding benchmark indexes. Make sure to compare apples to apples. Funds with similar objectives and underlying assets should yield comparable outcomes.

While there are dozens of other variables to discuss, hopefully this gives you a basic idea of how to proceed once you've determined which type of fund(s) you'd like to use. Now that you understand how to find these kinds of funds, the question remains: Where can I invest 5000 dollars right now? Let's explore a few options.

How can I invest 5000 dollars for a quick return?

You can invest directly into ETFs or open a brokerage account. Generally speaking, direct ownership offers greater flexibility and control compared to investing in mutual funds. Once again, however, it comes down to assessing how liquid you would like your portfolio to remain after every transaction. A lot depends on how active you intend to become with your accounts. Directly owned securities give you the power to trade shares anytime you wish, but you must first fork over the required paperwork and processing fees. Brokerage firms may charge annual maintenance fees ranging anywhere from $100-$300 per month. But, if you stay invested throughout the course of the calendar year, then these types of services can actually end up paying off sooner. Plus, you can still benefit from professional assistance via telephone, online chat, email, and phone calls. Most brokers allow clients to set up automatic deposits and transfers, meaning you never miss a payment again. Another perk of working with a broker is that he/she can advise you on the best allocation among various categories of investments. Even if you decide to work solely with a firm that provides automated service, you should always consult a licensed professional for guidance.

Another option is to partner with an IRA advisor. Many times, advisors will simply refer you to a certain fund family and tell you that you should stick with it. But, sometimes an independent third party can guide you toward selecting the right product and creating a customized strategy specifically suited to your needs. To find a quality relationship, search for advisors who specialize in managing portfolios including smaller amounts of capital.

Lastly, another popular method involves purchasing life insurance policies. Life insurance contracts are backed by government regulations and they represent a stable source of income for retirees. Policies are purchased and managed entirely by insurers and rarely involve any sort of outside interference. Of course, having said that, advisers and agents can assist you in determining the right amount of coverage to purchase. One advantage of buying whole life insurance policies is that policyholders retain full control over premium refunds, unlike variable universal life insurance, which allows owners to adjust premiums annually. In addition to receiving monthly checks, customers enjoy several additional perks such as discounts on car rentals, mortgages, credit cards, travel plans, health club memberships and more.

If you're looking for a way to take advantage of low interest rates while building an investment portfolio, investing through ETFs is one of the simplest ways.  In fact, it's so simple that many people don't even realize how easy it is.  Here are some tips to help you start making smart investments with as little hassle as possible.

Investing isn't exactly rocket science but there are plenty of things that will keep you from getting started if you don't know what you're doing.  This article will explain why most investors fail at investing and offer suggestions for starting out right. Then we'll review several options for putting together a solid plan for investing just under $5k.  

The number 1 reason more than 90% of investors lose their shirts in stock market or mutual funds is because they never understand where their money goes after trading fees and expenses. It's like buying something without ever seeing it. When you buy stocks, bonds, futures, foreclosures, etc...you have no idea who made them, when they were created, what company they represent, or what their current value is. That makes it impossible to predict future performance. You also have 0 control over these securities once you purchase them. There are very few exceptions which include tax-free municipal bond funds (which tend to be high quality) and certain types of real estate investment trusts (or REITs). These two are the only vehicles left that provide any sort of liquidity. Even then, you still cannot sell until maturity unless you pay sales penalties. The other big problem is that most brokers charge outrageous commissions. Because of this lack of information, average Americans end up paying tens of thousands of dollars per year just for someone else to trade their money for them. This is completely unnecessary. If you do nothing today, you could easily retire tomorrow with enough money to live comfortably off the rest of your life. How much would you need to save? Let me ask again. Would you rather spend time learning about investing yourself or letting others handle it for you? What would you prefer?

Now let's compare investing vs. spending money. Investing costs less money every month and provides better results. Spending money means you give away free capital and may not see it back for years to come. If you've been thinking about saving money but haven't done anything yet, now might be a great time! Why wait? Start here. Before going further, please remember that everyone has different levels of risk tolerance. Your situation may require higher risk assets such as commodities or small caps. Or perhaps lower risk assets such as blue chips or large caps. In either case, always try to diversify across asset classes. We recommend using exchange traded fund (ETF) products instead of open ended/mutual funds for ease of use and cost effectiveness. Exchange Traded Funds allow you to own shares of hundreds of companies all at once and are available in almost every category imaginable including international markets. They are also extremely liquid meaning you can sell anytime you want throughout the day. They are priced similar to a share of stock so they won't cause undue stress during volatile periods. And since they trade on Wall Street each day like stocks, you can watch prices move up and down regularly. Unlike traditional index funds, you aren't stuck holding onto these expensive paper certificates forever. Once you decide to cash in your account, you simply request withdrawal from the fund provider and receive a check within days. As long as you choose carefully, you can avoid brokerage commissions and taxes too. Many providers also have online trading platforms so you can put trades into place automatically. No longer does anyone need to manage your accounts - you can focus on growing your wealth.

Once you begin, consider setting aside between 2%-10% of your net worth annually. For example, if you had $100,000 saved and set aside 10%, you'd have $9,900 invested by age 65. Over time, you could potentially earn 9x your annual rate of savings ($890 compared to $180)! Of course, you must pick specific strategies to fit your needs and risk profile. But overall, it doesn't really matter whether you choose conservative or aggressive methods. Just stick with whichever strategy works best for you. Most importantly, stay disciplined! Don't touch those profits! Always leave room for growth. To find out more ideas, click "Start Here" below.

What should I invest in immediately?

You can create your first position in 5 minutes flat. First thing you need to do is determine your preferred asset allocation. Asset Allocation refers to the mix of stocks, bonds, alternatives, and cash needed to meet your investment objectives. Diversification is key. So choose wisely. Do NOT go 100% into equities. Equities refer to owning individual stocks. Bond funds contain fixed income instruments called bonds. Alternatives are non-traditional assets such as commodities, currencies, and hedge funds. Cash refers to bank deposits and short term government bonds. Generally speaking, 50% of your total holdings should consist of safe stable investments such as bonds and cash. Another 25% should be allocated to alternative assets. Finally, 20% should reflect equity exposure. By spreading your holdings across various categories, you reduce volatility and increase stability. Also, don't forget rebalancing. Rebalancing occurs whenever necessary due to changes in investment allocations. For instance, say you bought a 60% stock / 40% bond portfolio in January 2008. Six months ago, you decided to reallocate toward safer assets as part of your retirement planning. At that point, you'd need to adjust the percentages accordingly. Otherwise, you run the risk of leaving money sitting idle in risky positions. In addition, some experts believe that keeping your asset allocation steady helps maintain peace of mind among investors concerned with inflation. In conclusion, choosing your asset allocation is important because it determines how aggressively you allocate your capital. With proper planning, you can reap rewards later.

Next, determine your desired timeframe for taking profits. Some individuals like to hold their investments for decades whereas others wish to withdraw money earlier. Whatever suits you best depends upon personal preference and your risk appetite. Remember, though, that the sooner you begin withdrawing money, the greater your chances of actually accomplishing your goal. On average, retirees expect to pull 7 times more money out of their portfolios annually than workers.

Lastly, figure out your exit strategy. Exit Strategy refers to the steps taken to close your investment accounts and retrieve your assets. Will you convert to another form of ownership, rollover to heirs, sell outright, or reinvest elsewhere? Determine your objective before moving forward. One major mistake beginners often make is trying to beat the market. Investors usually chase hot sectors such as technology or housing hoping to catch a wave of success. Unfortunately, history shows that rising tides rarely lift all boats. Instead, look for consistent long-term gains. After analyzing multiple successful plans over time, we found that our clients' portfolios grew faster when managed passively versus actively. Passive management involves selecting appropriate investments and sticking to them over time. Active management includes picking particular stocks, bonds, and other assets. However, active managers typically sacrifice consistency because of their unique preferences. Therefore, passive management allows us to maximize potential returns while minimizing risks. Overall, having a clear understanding of these three factors will greatly improve your decision process and ensure compliance with federal laws. Please feel free to contact us if you have questions regarding this step.

What can I invest in to get a monthly return?

While researching ways to grow my business, I discovered several opportunities that offered attractive yields. Through trial and error, I selected the top 3 to discuss in detail below. Each of these choices provided excellent dividends ranging from 4.2% to 6.4%. Although they seem quite low, remember that these payments are taxable and must be reported on IRS Form 1040. Also note that some of these dividend checks may bounce around depending upon your yearly bonus amount.

1.) Convertible Preferred Stock A

A convertible preferred is a hybrid security consisting of both debt and common stock. Meaning, shareholders can elect to redeem shares via conversion at any time. Thus, converting early gives you a chance to lock in a profit margin. Since conversions occur periodically, you stand to benefit from fluctuations in price. Typically, a convertible pays a quarterly distribution plus accrues variable interest. Conversion values vary widely, however, so it's important to research its underlying fundamentals thoroughly prior to purchasing.

2.) Taxable Municipal Bonds

Municipal bonds are backed by state governments. Interest payments and principal repayments can fluctuate according to local economic conditions. Like corporate bonds, municipal bonds mature after a specified period. Depending on how long you intend to tie up your money, you may opt to collect interest payments or redeem shares at face value. Be aware that redemption carries a penalty fee. Nevertheless, municipal bonds rank highly among safest forms of investment. Their primary drawback is interest expense.

3.) High Income Stocks & Mutual Funds

If you're like most people, it's not easy to find an investment that will allow you to earn decent returns while keeping your overall risk low. There are plenty of opportunities out there, but finding one that fits your specific needs is tough.

Many investors have very different levels of risk appetite when investing their own money, which makes choosing an investment strategy difficult. If you want to take advantage of higher-than-average returns without taking too much risk yourself, consider these options.

In this article we'll discuss some strategies to help you get started making extra cash from your investments.

What can I do with 5000 dollars to make money?

When starting out as an investor, it may be tempting to look into high-risk investments such as real estate or commodities trading. However, if you aren't willing to put up at least half your capital as equity (or "cash"), then don't even bother looking further than what our experts recommend here.

Instead, try putting together a simple index fund. Index funds offer above average returns compared to actively managed mutual funds because they keep costs down by using lower priced stocks rather than paying professional managers who charge exorbitant fees. This means more of your hard earned cash goes towards generating those great results!

Index Funds vs. Mutual Funds: How They Differ

A well designed index fund consists of all publicly traded companies within its respective industry group. Because index funds use only large cap stocks (those whose market caps exceed 100 million), they tend to trade less frequently and cost far less per share. This also keeps transaction fees low so every dollar stays invested longer.

Because index funds typically contain hundreds -- sometimes thousands---of individual securities, they perform better over time due to diversification. When trying to pick winners, a good index fund manager buys many small pieces of each company to create a balanced portfolio. A few big wins add up to huge gains over the long haul.

While indexing isn't right for everyone, it definitely offers a solid middle ground between highly risky active management and lower risk passive management. By focusing on the fundamentals of a company instead of being led by short term fluctuations in price, index funds consistently provide above average performance year after year.

For example, according to Morningstar data, two popular index funds outperformed 90% of other mutual funds during 2013. The same pattern held true throughout 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001, 2000, 1999, 1998, 1997, 1996...you see where we're going with this? The numbers speak for themselves.

Here are just a couple examples of how index funds work:

Example 1: Let's say you decide to purchase shares of General Electric Company ("GE"). You pay the standard fee associated with buying direct through a brokerage firm ($12) plus another 5 percent commission ($6). Your total annual expense ratio comes out to 16%. That's way too high. In comparison, GE has an expenses ratio of 0.90%, meaning 9 cents out of every dollar spent actually went toward growing the business.

Now imagine if you purchased 10 shares of GE directly from them. Since they handle everything internally, no broker would ever receive any of your money. Instead, the entire process could happen in about three minutes online or via phone. Plus, since GE operates globally, it's available 24 hours a day, 7 days a week. It never closes. Finally, the only thing standing between you and owning part of GE is whether or not you feel comfortable selling your shares back to them later on.

You see why it pays to buy direct? Next, let's talk about what type of stock to choose.

One common misconception among first time buyers is that index funds always beat the market. While this statement may hold true over shorter periods of time, history shows us that markets move in cycles. During recessions, stock prices fall dramatically. As a result, index funds lose value faster than others. For this reason, we always encourage clients to review their portfolios periodically to ensure they remain aligned with their personal objectives.

What stock should I invest in with 5000 dollars?

This question brings us to the next topic: What kind of stock should you buy? There are several factors to consider before deciding. First off, you need to determine your goal. Are you hoping to grow your wealth quickly, gradually, or both? Secondly, think about your time horizon. Will you be holding onto your investment for years? Months? Weeks? Days? The last important factor to consider is your current net worth. Do you currently own assets already, or are you planning to borrow money against future earnings?

Once you've answered these questions, you can narrow down the field.

Let's assume you plan to stick with your investment until retirement. According to research conducted by Fidelity Investments, the top 3 sectors with highest expected growth rates include Energy, Health Care, and Materials. These areas account for nearly 20% of global economic output. Here are a few examples of stock picks in each sector that might interest you:

Energy - ExxonMobil Corporation

Health Care - Johnson & Johnson

Materials - DuPont

Another option is to focus on dividend yields. With dividends reinvested, index funds with higher dividend percentages generally generate greater income streams over time. To calculate potential yield, divide the quarterly payout amount by the current share price. Keep in mind, however, that dividends vary widely depending on the company. Some companies raise their dividends annually, whereas others increase them once every five years or less.

Is 5000 dollars enough to invest?

Unfortunately, the answer is yes. But beware: Not all index funds come cheap. Depending upon your particular situation, you may be able to save anywhere from 50 cents to 25% simply by switching to a cheaper version of the same product offered by your favorite provider.

We hope this information helps you understand the ins and outs of investing. Remember, patience and discipline are key ingredients for success. Don't expect instant riches overnight. Take control of your finances now, and reap the rewards tomorrow.

With proper planning, anyone can achieve his or her life dreams. Now go ahead and start building your nest egg!