Lux Investing
How would you invest $1,000,000 in order to make the most money in one year?
I'm working on a school project, and I'm looking for good ways to invest money. For the assignment, we are hypothetically given $1,000,000 and only one year to make a profit from it. There are a few rules... -We cannot invest it all in one place. -We can't just place it all in the bank to collect interest. -No investing in anything illegal (I know I know..no fun :p) I'd also like to get your opinion on some ideas I already have, and I need help elaborating on some that I don't know much about. I'm definitely thinking of buying a bunch of different stocks, such as Disney, Research in Motion, Target, Google, and a few others. I'm also probably going to purchase a CD. Any tips on either stocks or CDs? Remember I only have one year to collect any profit from my investments. Also, everything doesn't have to be real (i.e. how much a certain stock went up), but it DOES have to be realistic and based on influential information. Oh & I just heard about T-Bills, can anyone explain? Thanks! Creative answers are acceptable too...one of my friends said they invested in a mining project that produced tons of precious metals and earned him millions. Also, when I said "realistic and influential information" I meant that there just has to be proof that what we say happened could in fact happen. For example, if I say the price of the Disney stock went up a certain amount, I would just have to back that up. So I could say they released a new cruise ship that really brought attention and rave reviews to their cruise line or something like that. Thanks again :) oops...I don't think I was as clear as I could have been on the time limit we have. We are given a year as the maximum amount of time to hypothetically invest the money, but we only have a few days to write the paper and hand in the assignment. That's where the made up part comes in... we don't really have a year to keep track of stocks and all that good stuff. lol sorry...I was running out of character space. Everything so far is really great though...I'm just going to play off of that.
Public Comments
- ENRON
- mutual funds
- let me give u something to work with today, a "good" CD rate would be around 5% average, thanks to increasing interest rates set by the U.S. gov't let that be ur benchmark; in other words, you should try to make above 5% of your principal (obviously, the more the better) so 1) invest a small portion in the highest current CD rate you can find... there are other similar alternatives, but everything has its pros and cons... i e CDs are taxable; but are insured (up to 100grand, i believe) 2) now find something with a better rate (when it comes to investing, theres usually an inverse relationship between risk and gain)... so look at relatively cheap stocks with a good chance of massive growth (check msn money) as a summary and as an example, you can do this: 1) put about 20-50% in a CD (online savings accts. tend to be higher, and are secure) 2) spread the rest across medium to high risk stocks, across Vanguard indexes, bonds/money markets with great rates, mutual funds 3) and if you dare, speculate on penny stocks or short over-priced stocks good luck use yahoo finance for "headlines" (current events that may impact the earnings of the company)
- T-bill are sold in 3 mo and 6 mo terms. they are sold at a discount and return the face value at the end of the period. They currently pay about 5%. They also come in shorter time periods but 3 and 6 are the most popular. They have one big advantage. The interest is free from state and local taxes. Here is the link. http://wwws.publicdebt.treas.gov/AI/OFBills It is generally an excellent idea to invest in stocks of companies whose products and services you enjoy. If you enjoy them chances are others will also and the company will be prosperous. For example I will bet that you like to shop at Target. I will also bet that there are others who also like to. Personally, I like their advertisements. I used to like to shop at Best Buy. I bought a few shares of their stock and the stock went up and up and up. Unfortunately, I got nervous and sold mine after it doubled in price. Stupid me. If you are going to do this right, you do need to make a spread sheet of the stocks you buy, when you buy them, the number of shares you bought, the price per share, the total amount you paid. Also have a column for the current price and current amount so you can see how much you are making or loosing. Also a % gain/loss. Don't forget the broker commission. Use $10 a trade as a nice round number. Now tell me. Have you ever shopped at BEBE? If so do you like the store or dislike it.
- Buy some rental properties and generate some rental income ;)
- Real Estate! I would recommend contacting Chris Harris at http://scbuyshouses.com He can assist/mentor you in getting real estate Risk Free, Not using your credit and with only the cost of some postage and marketing expenses. If it costs only $50 total to buy 1 property....You can buy 20,000 properties with $1,000,000 If each property(at conservative numbers), was worth worth $100k, your portfolio holdings would total $2Billion. If you were to hold all of those properties...and you won't. You will cash out on most. But point being...Real Estate is definately your best route.
