I'm 20 years old and currently attending university for a double major in engineering and science fields. My college expenses are being covered. In addition to that i have worked for the past few years accumulating savings for myself. Out of my savings i'm willing to invest more than 5k. I have opened a credit card for myself to accumulate credit. Since i wont require much of my savings for at least 2.5 years i think it'd be best to invest it. I am currently considering choosing a mutual fund and then bonds after the interest rates are increased. I would like to ask for the community's advice on my consideration as well as any other options that would be beneficial for a person in my position. Thank you for your advice, i'm eager to learn any and all recommendations appreciated.
2.5 years is a short period in the stock market. That means there is a significant chance it will be lower in 2.5 years, whereas it is very likely to be higher over a longer time period like 5-10 years. So if you want the funds to grow for sure then consider an online savings account, where you might earn 1-2%.
If you want to do stocks anyway, but don't have any idea what fund to buy, the safest default choice is to buy an index fund that tracks the S&P 500. Vanguard's VFINX is one example.
Put it in a Vanguard fund with 80% VTI and 20% VXUS. That's what you'll let set for 10-15 years. For somebody that is totally new to investing, use "play money" in the stock market. It's easy for young people to get dreams of glory and blow it all on some stock tip they've seen on Twitter.
Over a period of time most mutual funds do not perform better that an index fund. Picking and buying individual stock can be a great learning experience.