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asawilliams's avatar

What is a good conservative investment right now?

Asked by asawilliams (366 points ) October 8th, 2009

I have some extra cash sitting in a savings account only earning .15%. What would be a better conservative investment if I don’t need access to it for a while (couple years)?

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18 Answers

evegrimm's avatar

You could always go with a CD. Many of my family members have done this in the past, and it works well. However, if you’re only going to let it sit for a year or two, it makes more sense to do a money market deal, through somebody like Charles Schwab, who pick the companies your money is invested in and (generally, afaik) guarantee a return rate. It’s not as good a return rate as risking your money on the market, but it’s better than just letting it sit in a bank.

holden's avatar

I haven’t the faintest clue, since all I seem to be able to do is lose money. but GQ!

evelyns_pet_zebra's avatar

Removed by Me… for not being a well-thought out answer

YARNLADY's avatar

Our best investment to date is a Canadian shipping company. I don’t have the name of it, but you can ask your broker.

RealEyesRealizeRealLies's avatar

Buy bullets. Buy all the bullets and ammunition that you can. The price has gone up 10 fold in the last three years and it keeps rising. Gun stores are putting limits on customer purchases and it takes over a month to get a crate of 38. Makes me feel special.

CMaz's avatar

Money Market account.

dpworkin's avatar

It depends upon the amount, your need for liquidity, and your investment horizon. Let me know, and I will try to give you a better answer.

gtponder's avatar

Do not use Money Markets.
They are no longer guaranteed by the Government. – As of Sept 30, 2009.
Besides , the dividends are almost 0.
Do not buy bonds, as they can only go down.
Put your money in a good Credit Union and wait for things to get better. – Hopefully.

YARNLADY's avatar

@gtponder Do you have a link to your information “as of Sept 30, 2009? I ask, because in my experience, Money Market was never guaranteed by the Government, and I’m wondering what you are referring to.

asawilliams's avatar

@gtponder Im working with around 20K and I will not need it for a couple years. Im not sure what you mean by investment horizon though

dpworkin's avatar

By investment horizon, I meant how long it will be before you liquidate the instrument. If it is eg for retirement and you are a young man, you have a long horizon, If you are 55 and saving for a down payment on a car, the picture changes.

asawilliams's avatar

@pdworkin I want this to help with a down payment on a house, so in about 10 years

dpworkin's avatar

It’s a little bit of a crapshoot, but put it this way – historically more wealth has been created in the stock market than in any other modality. It is subject to crashes, as we know, but statistically speaking, over the long term, it rises in value faster than other vehicles.

I think with a 10 year horizon, and with $20 grand, you could be very conservative and buy long bonds, or you could do some risk-taking and invest in an indexed Mutual Fund, tied to the performance of the overall market.

I’m 60 and penurious, so I’m staying out of stocks, but you have more choices. If I were 20 years younger I would stick to the Fund. Don’t mess around with managed accounts or fee-per-trade accounts, because you’re not sophisticated enough to watch those fuckers (neither am I.)

justin's avatar

@yarnlady, the gov did an emergency guarrantee on money markets to prevent panic after the lehman bankruptcy, because a mutual fund that had a lot of lehman short term debt was forced to state a value of 97 cents a share, “breaking the buck”. Since money market funds are supposed to be ultra safe, the govt didn’t want a new panic to start, and issued a temporary guarrantee.

YARNLADY's avatar

@justin Thanks for the information. However, that does not count as a Government Guarantee on Money Market Funds. To state otherwise could be a grave injustice to readers of this site. Of course, we shouldn’t believe everything we read on Fluther, but neither should inaccurate statements be allowed to stand, unsupported.

justin's avatar

CDs are safest, and you are only commiting to the term of the CD, which can be 3,6,12+months, so that fits your couple of year time frame. Money market accounts are still very conservative/relatively safe – and the govt has shown they are interested in making sure those don’t drop in value. Neither will get you very strong returns, as interest rates are being kept very low by the federal reserve, but you should get 1–1.5% at least, 10x better than your current, even if it isn’t much. Or hold out a bit longer and see if interest rates start to rise. With 20k over 2 years, you are still only talking a few hundred dollars in interest.

If you are talking 10 years out, I would definitely consider stocks, probably start with market index funds, for at least some percent of your cash.

Hypocrisy_Central's avatar

Fact from fiction, truth from diction. If you want a secure investment that you can let stew because you do not need the cash liquid right now is real estate. The real estate you should focus on right now is lien sale property. Make sure you do your due diligence and find property that has no problems environmentally etc. It is basically a win-win, if the person redeems the lien you will make a healthy but of interest, and if they don’t depending on the lien you will get control of a piece of property for cents on the dollar which you can then sale for discount and still make a profit, or hold on to it for equity or collateral in a loan or other land deal.

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