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My knowledge regarding stocks, mutual funds, etc.. is almost zero. I came from a country where majority of people dont know about stock market neither do they invest in it.
After living in the US for a few years, I was able to save some money. It is currently in the bank. And the interest is so low.
I am not a gambler and high risk is NO for me.
All I want is an investment where the interest rate is equal or slightly higher than the inflation rate.
My knowledge regarding stocks, mutual funds, etc.. is almost zero. I came from a country where majority of people dont know sh.it about stock market neither do they invest in it.
After living in the US for a few years, I was able to save some money. It is currently in the bank. And the interest is so low.
I am not a gambler and high risk is NO for me.
All I want is an investment where the interest rate is equal or slightly higher than the inflation rate.
Which investments offer these rates?
Thanks,
Certificates of deposit, US treasuries (also inflation-linked known as TIPS), insured investment grade municipal bonds (tax free), investment grade corporate bonds, roughly in that order.
As you have not mentioned the name of country, it is a bit difficult to advise about the invest option you want as interest rates vary from country to country. You can do some online research for this.
As you have not mentioned the name of country, it is a bit difficult to advise about the invest option you want as interest rates vary from country to country. You can do some online research for this.
I know which one it is (kumusta, OP), but it isn't relevant. The OP is looking for US investments of US-based funds. Doesn't matter whether he came from Andorra or Zambia or someplace in between.
TIPS might well be the way to go, especially with the low risk tolerance stated. bale02's advice was direct and to the point.
You need to sit down with someone to help you with this. Not knowing your financial situation, your age, your goals, etc. getting random advice on the internet isn't going to help you much. If you are 23 and want to park your money in a CD, I would say that is more risky then putting your money in a nice conservative mutual fund, for example.
You need to sit down with someone to help you with this. Not knowing your financial situation, your age, your goals, etc. getting random advice on the internet isn't going to help you much. If you are 23 and want to park your money in a CD, I would say that is more risky then putting your money in a nice conservative mutual fund, for example.
Over reliance on CDs nearly left some of my elderly relatives wiped out. There have been a few periods where, because of unique circumstances in banking sector and the actions of the broad market, CDs have been a way to at least tread water with savings, but NOW is not one of them. CDs right now may be technically paying more than the "core inflation rate" BUT NOT ENOUGH TO keep pace with changes in the costs for ENERGY and other goods that are not part of the inflation measure.
For the OP, a young person with presumably a long term horizon for their savings growth, the obvious choice in such a case is a Mutual Fund (or ETF) that similarly has a stated goal of "long term capital appreciation" AS WELL AS THE track record to back that up. You can use various 'screeners' at pretty much all the major investor companies to pull together data that will help you find such investments. I believe that if you do a little bit of homework on your own you will benefit FAR MORE than relying on some one else's "picks" and you will have the motivation to compare the performance of the fund you selected to it peers in a regular basis.
Right now you can find many funds that are very appropriate for this kind of thing. I am reluctant to say any one is "better" than others. I do however, thing it is important to get a sense for "what to look for", so I will post an example: Nuveen Tradewinds Value Opportunities I (NVORX) - Google Finance
If you look at the page there is a scary dip right at the end of 2008/ beginning of 2009, BUT since that correlates with basically all other investments in the whole world you can almost ignore it. The fact is even with that dip the folks that manage this fund have done an outstanding job for an extended period. The 3 year return in 5.53%, 5 year return is 11.61%, and even more impressively they have done this with an "beta" (measure of volatility) that is very very slightly less than 1.00, which is technically a way of saying that these fund managers have been able to get these returns WHILE BEING LESS effected by price swings than the overall market. Beta Very impressive.
Because of those measures (and others, which are more technical) the fund has earned a Morningstar rating of 5 stars for both 3 & 5 years -- that is an OBJECTIVE measure based an a calculation of the relative risk adjusted return of similar funds that means it has top 90% performance. Pretty impressive: Morningstar.com - Data FAQ Page Now there are LOTS of other funds that MAY outperform this one, but the statistical correlation of a fund falling from the top 10% in both 3 & 5 year down to a category in the bottom is rare. Thus by looking at that rating you have some assurance that "the wheels won't come off this thing" in sorta the same way that a Consumer Reports guide to used cars is useful...
Remember, you can't beat the market forever, and you may be wise to read some the very good books by Peter Lynch, John Bogle, Charles Ellis and others. No investment is EVER really a "set in and forget" thing. You need to understand how the whole process works and what is realistic.
You need to sit down with someone to help you with this. Not knowing your financial situation, your age, your goals, etc. getting random advice on the internet isn't going to help you much. If you are 23 and want to park your money in a CD, I would say that is more risky then putting your money in a nice conservative mutual fund, for example.
For life, sure, that's more risky. For the short term, it makes complete sense to put the money somewhere safe while getting educated.
After living in the US for a few years, I was able to save some money. It is currently in the bank. And the interest is so low.
Assuming you don't have an emergency fund, this is good place for it. The trade-off for that low interest rate is that you can go get that money in the next 10 minutes if you want.
Investments are all well and good, but won't do you a bit of good if your car breaks down and you need to get it fixed.
In general:
Build and emergency fund,
Pay off your debt,
THEN think about investing.
Good luck!
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Very true!
