I have 500$ to invest on Ameritrade. It is not enough to get into a mutual fund. What is a good safe stock?

Is there a good stock that I can invest in that will provide a bit of a return over the next 5 months?

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  • 1 decade ago
    Favorite Answer

    There is NO such thing as a safe stock.

    Your time frame suggests short term speculation. Are you willing to take a loss or big loss on your invest?

    If no, that money should not be in the market for such a short time frame.

    I would ONLY put money in the market if you have a 15-20 year time frame and one is dollar cost averaging such as in the S&P 500 index.

    If your time frame is 5 years or less and you will NEED all that money, I would not be in the stock market.

    If you don't need ANY of that money and can afford the loss, then feel free to speculate as you are willing to tolerate that risk.

    Source(s): --- Fmr Securities Compliance Officer/ Registered Principle (see bio) --- Finance & Risk Management Consultant
  • 1 decade ago

    Amanda:

    No, there is not a good, safe stock, certainly

    not in this economic environment that has

    seen the price of many stocks plummet in

    value, many of which, will not recover ant

    time soon.

    You window of time is too small, and for

    stocks, so is your capital base.

    Buy yourself a 1/10th or 1/4 oz gold coin,

    depending upon how much you want to

    spend, and/or a few 1 oz silver coins.

    Both gold and silver have been a historic

    store of value during economic upheaval.

    At least they hold value better, but there

    is no guarantee that anything will hold its

    value over the next five month period.

    Mutual funds are okay in a bull market. This

    is now a bear market. Stay away from funds.

    A better investment would be in yourself,

    gaining some knowledge so that you can put

    yourself in a position of determining your own

    financial future. No one will have more of a

    vested interest in it than will you.

    I always recommend spending $15 on William

    O'Neil's "How To Make Money In Stocks."

    It is an excellent primer for understanding

    why one should always invest only in strong

    performing stocks.

    It may be years before that kind of market

    environment returns, so you have time on

    your side, certainly more than five months.

    Use it wisely.

  • 1 decade ago

    Actually, this is the best time in buy stocks and mutual funds, cause they are at its lowest. If you think you need a lot of money to get into mutual funds, that is completely the wrong concept. You can even start investing in mutual funds for as low as $50. It just really depends on what company is helping you invest. There is never a guarantee or safe stock. When you invest, it is like gambling. There are risks, but there are companies that help watch over your investments and move the funds elsewhere if that stock is not doing well. Do not go to a bank to help you invest.

  • Anonymous
    5 years ago

    The so called market in their case is the SP 500 (tracked by SPY). Now many mutuals will track the SP 500 and charge you for it, when you can just buy SPY which is an ETF. There is also a hidden tax you pay for being in a mutual fund that you don't pay with ETFs. If somebody in a mutual fund sells theri shares, the others in the group have to pay the taxes. You don't actually don't see these taxes, but they do take a bite on your returns. So if You bought SPY and a Mutual Fund bought just SPY, you would have a better return if you just held SPY instead of the mutual fund. I've seen funds track the SP500 and their returns could be 3% different from each other because of fees and taxes.

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  • Rabbit
    Lv 7
    1 decade ago

    You have enough to buy about 13 shares of LG (Laclede Group).

    A little over half of it is institutionally owned (like banks, insurance companies, and mutual funds), so they seemed to like it. It has a tad over $3 per share in earnings. Right now it pays about a 38 cent dividend, which sounds pretty pathetic, yet if you've checked at what banks are paying, it looks pretty good. The company has about 22 million shares and the equity is close to $500 million (do the math and compare it to the $36-ish stock price). Buying a natural gas utility as winter wanes is not the sexiest way to wade in, but you could easily do worse. The price may fall some during summer, so buy some more if you can. Next fall, when things get cold again, it will be worth a good deal more, which is the general idea. Sounds pretty safe to me. What do you think?

  • 1 decade ago

    $500 in a stock will not produce much in 5 months. The only times stocks make good money is in the long run or if you just get lucky. Also, I'm sorry to break this to you, but there is no such thing as a safe stock.

  • 1 decade ago

    Buying a mutual fund is like getting ripped off at a circuit city liquidation sale. Mutual funds charge you all sorts of fees, on average they only produce an 6-9% return a year, which is not even enough to keep up with inflation.You need to put you money in an ETF I would recommend XLF, and if you really like playing with fire why not load up on FAS and FAZ??

  • 1 decade ago

    If you want safe I would look into a large company that has not been affected too much by the economy. A lot of good companies have been dragged down in this bear market. Try and find something with a dividend as well if you would like that.

  • Anonymous
    1 decade ago

    I haven't heard the words "safe" and "stock" for the past two years. Consider that before you invest.

    If you want safe, buy bonds.

  • 1 decade ago

    Just put that in the bank unitl you have enough for a mutual fund.

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