I am a rising senior in college and saved up $3,000 dollars from my summer internship. I have done a lot of research online about investment options for my age and I decided that opening a Roth IRA seems like the best choice for me. Specifically an index fund ROTH IRA. I plan to max out my ROTH this year ($5,500). However I also will be having a part-time job during both semesters. I calculated that by the end of my senior year (may 2015) I will have saved up an additional $5,000.
This is where I am stuck. where do I invest $5,000? Do I Invest in individual stocks since I am young and can handle the risk? or do I invest in a general account index fund that is taxable on capital gains? Or do I pick a sector specific index fund such as the healthcare sector? I was looking at small-cap value index funds since they are diversified but also are aggressive in growth as well as risk.
Pretty much I am looking for advice/ suggestions on what to do with the $5,000. And no I do not have any debt or student loans.
I am sorry but I forgot to mention this. I will graduate with $10,000 leftover in my college fund that my parents have for me. So i am not worried about keeping the $5,000 as a liquid emergency fund in my bank account. If i get a job out of college and they have a 401(k) then does it make much sense to have a roth as well? or shoud i use that money and invest in something other then retirement? All of thise advice is great and just wanted to thank you guys for your input.