For a short time (about a year or so) I will be able to put away about $2000 a month.

I have looked into stocks, played to stock market a while ago and lost a lot of money, yes i was playing in the penny stocks but it has made me apprehensive none the less.

I have also thought about putting into gold or silver something like that.

I have looked at a saving account which through my bank, which will pay out .90% not bad but I am wondering if there is something better.

I am not looking to get rick quick just be able to put the money into something that will grow until I either need it or want it.

  • When do you think you will need to spend the money? Short term means you want to spend it in year? Or 5 years?
    – Daniel K
    Jan 10, 2020 at 0:27
  • @DanielK I am not really sure, I do know after a year or two I will not have the money to invest, for now I can invest for a couple months, maybe a year or two, but after that they money may sit until I need a car (3 - 5 years) or until my daughter get married (20 - 25 years) Jan 10, 2020 at 0:35

3 Answers 3


I have also thought about putting into gold or silver something like that.

Precious metals are for two things:

  1. preparing for SHTF TEOTWAWKI WROL (Disaster scenarios, for those not wishing to click away), and
  2. speculation (which as you know is risky).

they money may sit until I need a car (3 - 5 years)

CDs at an online bank (current average rate for 12 month CDs is 2%). Maybe corporate bonds, if you want to squeak out a bit more rate, at the risk of a possible bond bubble.

or until my daughter get married (20 - 25 years)

A mix of low-cost stock and bond funds.

The problem is that the standard investment strategies for "shortish term" and "longish term" are fundamentally different (mainly that 3 - 5 years is more savings than investment).


For short term saving (3-5 years), you want something low-risk. Try a online savings account with a bank like HSBC Direct, Ally, or Simple. They will give you a higher APY than most traditional banks (1.6-2%) and you can pull money out at any time. If you have a more solid time-frame, a CD could also be a good choice.

An index mutual fund or ETF can make for reliable long-term investments (20-25 years). Find a low-cost, full market index like Vanguard's VTSAX or Fidelity's FSKAX and leave it there for the long term.


First thing first - In a short span of 1 year you can not expect high returns, it is much better if you are just able to bypass inflation in short period. As per your comment, we can plan something better for various time slices.

You have $2000 per month to invest. Divide it in three chunks (depends on your risk bearing capacity, I am just putting an example):

Very short duration (1-2 years) : $850

Invest in Short Term Bonds or Bank Fixed Deposit / Recurring Deposit

3-5 years period : $750

Invest in Blue Chip or Large Cap Mutual Funds (Systematic Investment Plans)

20-25 years : $400

Even small amount will generate huge wealth in long span of 20-25 years because of Compounding Effect. Here you can use high risk mutual funds like small/mid cap funds or play in stock market as well but not in Penny Stocks, no and never.
Only invest in any penny stock if you know their management very closely and you are very sure of their vision and future plans. Also here you need to have an futuristic vision regarding company's model, product, plans, everything. If you are confident in all of these then only think of investing in Penny Stock and not all amount just use less than 10% of your portfolio size.
But if you don't have above level of expertise then stay away from penny stocks. You have many good companies with strong leaderships and good governance, invest in them. Here you can do Systematic Equity Plan i.e. monthly investment in few top rated stocks.
How to find them ?

  1. Select few sectors in which you have some knowledge.
  2. Out of these, select few sectors in which you see brighter future and growth.
  3. Out of these selected sectors, search for two market leaders in each sector.
  4. Now check out the history of these limited stocks which you have selected from above steps.
  5. Select all those which have perfect past(5-20 years) track record (governance, return, management, etc).
  6. Now put your $400 in few of these every month, re-balance half-yearly or yearly.

Re balancing is very important to keep your capital safe and to get better returns, even in case of Mutual Funds also. So play it wisely.
If you are not able to follow above steps to identify best stock then one more easy way you can opt for:
You can invest in Exchange Traded Funds (ETF) or can copy top 5 stocks (as per market cap) from any ETF.
You can also use few filters simultaneously to select best stocks in the country. Like wherever you belong to, your country has few companies listed from more than 20-25 years and having highest market cap and have trusted governance/management track record and having 10+% CAGR returns from last 3+ years. You can select best 5 out of these and invest. After 1 year use same query to find out new situation and re-balance your portfolio.

I always say to invest in 5 stocks at a time so that you can weekly track any news related to them. This is very important as even one bad news can destroy fame of any company and in no time it can become 0. So remain updated.
Generally if you select top companies of any nation based on above criteria, there will be very rare chance of capital erosion risk. And even if management is trustworthy and strong then any bad news are good time to grab high quality gems.

And last, Investing in stock market are subject to risk, take your decision wisely.

  • So... penny stocks it is! :)
    – Allen J
    May 21, 2020 at 6:32

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