Expert: Dr. Joseph de Beauchamp - 2/27/2005

Question
Dr. Joseph de Beauchamp,

I have been able to save $5000 in the past year by working extra hours after school.  Currently the money is in the bank.  I plan on using it to pay for school in January 2006.  Until then, I would like to know the best way to invest $5000 and make a descent return. I have some investment background through my financial classes at school, but I do not want to be very risky with the money. What are my best and most profitable options?

Thanks!

Regards,

Anthony

Answer
Anthony,

Just keep the money in the bank. I would not even recommend a mutual fund. You need about a 5 year time horizon to invest in great risk. Over the last 6 years, most peope are at a break even to 2% return. With your situation and horizon being short term, without being able to "play" with time and spreading the risk, bank account savings is the best for you.

You might go to the free site of http://wfnn.info and look over the mutual fund section. You can search and look up about stocks. You could create a mock portfolio and play the market, just don't use real money for this. Not loosing is the primary objective in any investment strategy.

Dr. Joe de Beauchamp