Best $5k, 5 year investment

With an emphasis on fairly low risk, the best I could find was a term share certificate at 3.94% at my bank. Anyone have any other suggestions? I'm kind of a finance noob. Thanks.

Invest in Meridian Tactical!!!

That way I can buy more inventory....

Nothing personal, but investing it in a single business is beyond the level of risk I'd like to assume.

open a brokerage account. tell him that you are looking for a municipal bond or similar. Try to find something that is being offered by a hospital district, school board or something like that which will be less likely to go belly up an default on the the bond. Five years seems a little low on the time frame, however there are lots of those things out there. For example, someone is needing to build a bridge or a dam or new wing on a hospital, often times they will offer a bond proposal at a guaranteed fixed return rate. Some mature at different time periods than others. A local broker will help you identify things like that. So will some other banks or credit unions. Might be worth calling around.

Example:
http://www.fortworthisd.org/bond/

That is the local school district's bond information page. Talks about construction projects, budgets, and things like that. They sell bonds to pay for things like that. Basically, they are borrowing money from investors, using the money for the projects (to supplement revenue from local taxes), and pay back with interest. That is how they work.

Rates are going up. Don't lock up the $ in something without a bump /ubbthreads/images/graemlins/bumpit.gif feature.

The investment you seek has only three attributes: location, location, location.
I am referring to real estate, land, condos, etc. Pretty much a slam dunk these days. Just my $ .02

Dave

Thats a pretty poor rate. You can do far better than that with a CD. Even I-bonds are almost as good (3.39%),are liquid after a year, and are inflation indexed. Start reading and researching here:

http://www.fatwallet.com/c/52/

Don't expect the people there to hold your hand though.

For example CD rates:

http://www.bankrate.com/brm/default.asp

Mark

If you're looking for low risk, you're gotta top out at likely.... oh say..... 6% or so. After you take taxes out of your earnings and inflation (say 3%/year) takes a bite, you're not making much at all.

Let me suggest another course of action.

Pay this $ down on some bills. Pay it toward your mortgage, car note, flashlight-induced credit card bills, etc.

Likely ANY of these above bills are a good bit above the return you will get, given your acceptable level of risk.

I agree that a bond is your best bet for a guaranteed return with minimum risk when you have a very fixed investment period (5 years in this case). A bank CD is even safer since it is FDIC insured. Do you have a specific need for the money in exactly 5 years or is that just an arbitrary investment horizon. If you can tolerate a bit more risk, a well-chosen diversified stock mutual fund would give you a chance to earn considerably more without excessive risk to the majority of your principal.

And of course Turbodog is correct in that your best investment may well be debt reduction if you have any. But it is harder to get the $5k in your hand in 5 years if you use it to pay off debt.

If this is savings for retirement, don't overlook the tax advantaged savings vehicles such as Roth IRA or 401k options, etc. There are also some similar vehicles for college money.

[ QUOTE ]
turbodog said:
If you're looking for low risk, you're gotta top out at likely.... oh say..... 6% or so. After you take taxes out of your earnings and inflation (say 3%/year) takes a bite, you're not making much at all.

Let me suggest another course of action.

Pay this $ down on some bills. Pay it toward your mortgage, car note, flashlight-induced credit card bills, etc.

Likely ANY of these above bills are a good bit above the return you will get, given your acceptable level of risk.

[/ QUOTE ]

If you have any outstanding credit card balances - it's stupid
to go invest some where as your return will be less than what
you gain from paying towards your credit card. /ubbthreads/images/graemlins/smile.gif

You should have invested it all in ARC lights last month...

.

[ QUOTE ]
DrJ said:
Plastics....

[/ QUOTE ]

Exactly how do you mean?
/ubbthreads/images/graemlins/grin.gif

.

From "The Graduate"

Mr. McGuire: I just want to say one word to you - just one word.
Ben: Yes sir.
Mr. McGuire: Are you listening?
Ben: Yes I am.
Mr. McGuire: 'Plastics.'
Ben: Exactly how do you mean?
Mr. McGuire: There's a great future in plastics. Think about it. Will you think about it?
Ben: Yes I will.
Mr. McGuire: Shh! Enough said. That's a deal.

/ubbthreads/images/graemlins/smile.gif

.