The best ways to invest $5,000

[Jgarrick]

http://finance.yahoo.com/news/best-ways-invest-5-000-180003687.html

You've padded your emergency fund, paid off your debt and saved up a few thousand dollars -- $5,000 to be exact -- that you're ready to invest. But is it best to put it in a mutual fund, certificate of deposit, index fund or exchange-traded fund?

"If you're asking what's the best way to invest $5,000, it's kind of like asking what should I have for dinner tonight? Well, it depends," says Greg McBride, chief financial analyst of Bankrate. "What do you like? What don't you like? Do you have any allergies? What are you in the mood for? The same thing [applies] here."

Before you get to specifics, such as how much risk you can stomach or what to choose off the menu of investments, start with the basics. "The first question you need to ask yourself is, 'When do I need to spend that money?'" says Manisha Thakor, founder and CEO of MoneyZen Wealth Management. "My rule of thumb is investing is something you do for the long run, which I would define as a minimum of five years and ideally 10-plus years. Once you are sure it's long-term money, now you're ready to really get into the nuts and bolts."

To help you delve into those nuts and bolts, we asked financial experts for advice on the best way to invest your $5,000. They suggested options for both the short and long term, if you're hoping to grow that money for retirement decades down the road.

(excerpt, remainder of article at link)

[Submariner]

1. The best ways to invest $5,000

Stuff it under your mattress. It's insanity to trust ones money in the hands of republican financial advisers on Wall St who have tools like derivatives, hidden fees, and other financial tricks hijinks to steal our cash and get away with it.

Trust no one. Especially a republican financial adviser.

[yeoman6987]

2. Definitely something of a Roth type vehicle

Pay the taxes today and enjoy the money later during retirement when who knows what the taxes are going to be. Right now taxes are pretty low. That will not stay that way so pay as much tax on money today so that when you do use the money in retirement, it is tax free and you won't have to worry about anything. I put as much into ROTH as I can. I pay the taxes today because who knows if that extra money I won't have to pay in taxes will come in handy. Everyone should be saving as much as possible for the future. Investing is very important.

[IphengeniaBlumgarten]

3. Consider the effect of inflation!

Money you will need soon might be OK under your mattress, but anything you want to save for the future needs to increase in value to keep up with inflation. If your time horizon is not very long, say a few months, then maybe a bond index fund or bond mutual fund. Otherwise, you probably need to look at a general stock mutual fund or ETF.

[donco]

4. In today's market

in a good/quality dividend paying stock and let the dividends rollover.