More suggestions on how to invest $2,000

Nov 18, 2006 by

Suggestions that were relevant a few weeks ago may no longer be relevant today. The market changes over time, and one must not make current decisions based solely on old projections. So, last week, I commissioned readers on mturk.com to offer another batch of suggestions on how they would invest $2,000, as a part of a diversified portfolio of investments. Here are the suggestions that I received:


I’d short Nike stock (NKE), selling at $99, and covering below $80 in late-January or early-February. This is when the mid-year earnings come out, and Wall Street finds out about the massive inventory issues.

I’d buy an international ETF, because I believe the US will have better business abroad, now that the Democrats are in power.
An investment with less speculation, but still high return is GM. Unless GM peaks, it has great potential IMHO.

I’d split it up to minimize risk. Keep 25% in the 5.5% bank account. Put another 25% into loans at prosper.com. Make sure to divide that $500 between ten different loans to spread out risk. Most loans there pay around 20%. However, with the default rate, most investors are getting about a 10% return.

The balance would go into an index fund. These consistently out-perform the stock market at large.

I would utilize an inexpensive online brokerage- perhaps Sogo or Scottrade and purchase as many shares I could get for that $2,000 of a REIT stock- they have been returning in some cases over 9% annually with their generous dividends- and the stock price itself is in a good environment to appreciate. Examples of equities I would consider are NCT, TMA, and SFC.

I would invest in Webex stock. This is a company that is doing very well as of late, and from what I have heard will only go higher. The stock was at about 21 at the start of the year, and since they acquired Intranets they’ve shot up, hovering around 40. Look for them to keep beating their predicted earnings.

I would put it in the Marsisco 21st Century mutual fund. It’s a large stock growth fund that has beaten the S&P 500 index in the one, three and five year time horizons. Most years it ranks in the top 25% of mutual funds in its category. It has a history of consistently good results, which doesn’t guarantee good rusults in the future, but it seems to me this history gives the best chance of good results in the future.

I would invest in ChevronTexaco Stock. Gas will definitely be up next year and so will their stock.

I would buy shares in Ceradyne (ticker CRDN). I am currently invested in it and it has returned about 1500 percent in the past three years; and it has plenty of room to grow further.

I would look into investing in several different startups in the foundary/hatchery of a college that specialized in entrepenuership. This is a very high-risk, long-term investment if you invest in specific startups, but if you can invest in the hatchery itself you could see earlier payoffs and less risk because you’d be diversifying over a dozen or so start ups.

There are several different ways I can imagine a return of 6% on a $2000 dollar investment my personal favorite on flipping an invesment that size is to take advantage of state and county auctions. One good time is tax-time which is coming up. About late April and May many states and counties have tax sales. I have found several cars that went for bucks that are well worth $3000 or more with minor work. They are few and far between sometimes, and there can be competition, but it does payoff from time to time. Last year I watched a Cadillac that was seized in a drug investigation that was well worth $20,000 with all the modifications and it sold for $3300. It could be the easiest money you ever made. There is sometimes less competition in other categories, I bought a hedge trimmer and various other things for pennies on the dollar too.

I would buy $2000 of CSH. We are going into recession. People are over stretched. This company has and will continue to do well for the next few years. They own pawn shops across America.

If I had $2,000 to invest for one year from today (11/15/06) I would purchase stock of Altria (Ticker: MO). Two reasons: 1) Regular dividends and 2) They will spin-off Kraft Foods which will do great for the stock.

You can try alphatrade free for seven days and see if it is for you. (I use it and like it.) http://www.alphatrade.com/
https://www.alphatrade.com/com.alphatrade.servlet.registration.RegistrationServlet?a=i&l=en&s=AlphaTrade.com_leftMenuAddon
And here is a good link for learning charts.
http://www.stockcharts.com/education/

See… just having $2000 wouldn’t mean much without the knowledge behind it. What I would really suggest is getting some books from the Rich Dad series. Start downloading financial podcasts and listening to experts… read articles. Spend it on education on getting into a mindset in how to invest your money. Learn how to start your own business on the side, or learn what to look for in investment properties and do a low/no money down deal that generates you positive cash flow and increases equity. Increasing your eduaction and learning whats right for you will help you increase your investment returns to the double digits.


How do I receive these suggestions? I pay people for them. Collecting the suggestions used in this column cost me 35. While the costs of writing this column have not been exceptional, donations from the readership are always appreciated. A donation of as little as $1.50 can help defray the cost of a week’s content.





5 Comments

  1. lydgate

    Very interesting topic. I have more money out than I need in student loans that will not accrue interest for a couple of years. I may look into some of these (with in-depth research of course) as a way of beating the interest rate on the loan. But I suppose this could be very dangerous as well…

  2. If you have loans with a low interest rate, I would recommend looking at the interest rate of your loans relative to that of risk-free investments. If your interest rate is below the risk-free rate, make a risk-free investment that you can liquidate before the loan is due. If you want to take on risk, that is something you must decide for yourself.

  3. If I was wanting to “play it safer” I would invest the $2000 in an index fund. The NASDAQ has risen over 11% year to date as well as the S & P 500 rising over 10% year to date.
    If I was wanting to risk more, I would use any of the available mutual fund screeners and look for ytd returns of over 20%, and look at their graphs for an upward trend.

  4. If $2,000 is was all the money I had in the world to invest, I’d put it into a six month CD and just keep rolling it over.
    It’s safe, reliable and
    has no risk. It’s the wood-paneled station wagon of interests; it gets you where you want to go, but with no style. It’s the first car your parents wanted you to have.

    But if I wanted to play a little more fast and loosely, I’d try my hand at penny stocks and index funds. But to stretch the money, I’d look for a brokerage that takes the least commissions.

    $2,000, depending on your outlook, can be a drop in the bucket or a fair amount to play with. If you’re looking for a quick gain, though, it likely wouldn’t be found with the amount of money afforded in the question.

  5. Given today’s economy, I would absolutely not advise anyone to buy a CD. As interest rates are rising, savings accounts are a far more sensible choice for those completely averse to risk.

    For a more complete treatment of this topic, see:
    http://adampowell.com/invest/?p=4

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