Best Way to Invest?

by | Feb. 08, 2010

Finances

Dear Dave,

In your opinion, what is the best way to go when investing a one-time, lump sum of $1,000 to $3,000 for a long period of time?

Josh

Dear Josh,

The first thing you need to do is define "long period of time." For me, when it comes to investing, I consider a long period of time to be five years or more. In this kind of situation I'd suggest either a growth stock or growth and income mutual fund. I prefer mutual funds with solid track records of 10 to 20 years.

People sometimes like to play single stocks on one-time investments of this size. I don't think that's a good idea. Over long periods of time single stock investments don't consistently generate the kind of returns that a good mutual fund will generate. Why cheat yourself?

— Dave

* For more financial help please visit daveramsey.com.

Comments and feedback can be sent to feedback@ldsliving.com