Need some advice

[KNBerger]

I inherited a chunk of money when my grandfather died a while back. Currently I am in college and the money is just sitting in a CD getting 1.25% interest on it. I would like to turn this money into more money than what the CD will give me, but I really dont know what I should do with it. I want a relatively safe investment, but one that will give me more than a 1.25% return on it. Anyone have any ideas or suggestions (besides giving it to you :-P) on what I could do with this money?

[adios]

First question, what is an acceptable rate of return i.e. what is the minimum return that's acceptable to you.

Second question, what is your holding period i.e. how long are you willing to defer accessing the money?

[KNBerger]

something better than 1.25% but nothing too risky. Holding period of 5 years or so. It all depends really on how my situation is out of college and whether or not I will need that money. But for now lets just say 5 years.

[Ray Zee]

as long as you understand the higher the return the higher the risk of losing all or some of your principle. you trade one for the other. there is no getting around it.

[KNBerger]

i realize that, I am a business major and have taken a few finance classes /images/graemlins/smile.gif but nothing too risky though, but i will be able to take some risk.

[SumZero]

The safest investment you can make are probably US gov't I-bonds. These are bonds that are guarenteed to give you a rate of return above inflation. I forget exactly how much above, but something like 1.5% above. These are backed by the US gov so they are pretty safe.

If you want a better rate of return a low fee mutual fund indexed to the S&P 500 or the DJIA would be your best bet. But on a 5 year time horizon there certainly is a lot more risk. If you had a 10+ years I'd say this would be the best bet. At only 5 year it depends on your risk tolerence.

[GeorgeF]

1) At your age invest in yourself. Consider learning a foreign language for example. Buy proper business attire and make sure you look as sharp as possible. Take a Dale Carnegie course.

2) Diversify, I suggest diversify our currencies with www.everbank.com. (http://www.everbank.com.)

I personally use closed end international bond funds for this purpose, www.cefa.com. (http://www.cefa.com.)

Vanguard has some TIPS and other US$ bond funds. There are similar ETFs(www.ishares.com) purchased at www.freetrade.com. (http://www.freetrade.com.)

3) I do not see any easy money in equity investments.

4) You should start to eductate yourself as to realestate. look at open houses. Read a book on inspection. Since you have some bucks you will likely be buying something in the near future, you don't want to screw it up.