Experts Give Thoughts On Investing $5,000
Some Experts Say Now Can Be Good Time To Invest
Updated: 7:55 pm CDT March 10, 2009
MADISON, Wis. -- You're not alone if you've cut back on spending, but if you have some extra money and are ready to risk a little bit, this week's "Good Question" offers some advice.
VIDEO: Watch The ReportInvesting has turned into gamble that not many want to risk, but many experts are saying that now's the time to get started, if you haven't already.So, if you had $5,000 to work with, what might be a good way to invest it in today's economy?University of Wisconsin-Madison School of Business Dean Michael Knetter said he'd stick to investments in the middle of the road."I would probably take a somewhat defensive and cautious position yet," Knetter said. "What am I doing? I'm getting my flat screen TV for $1,000, maybe I'm keeping $1,000 in something fairly liquid, and I'm putting $3,000 in the market and probably betting on the technology sector in the U.S. to really carry the day."But Knetter, and others, stressed that it all depends on the situation that you, as an individual or family, are in.Adam Schinke, of Thrivent Financial, said that before people make a risky roll of the dice on an investment, they should evaluate their current situation."The first thing I would say would be to pay off any outstanding credit card debt or balances that you have," Schinke said. "The second thing would be to reevaluate your emergency reserve account. Do you have that three to six months of expenses built up in that reserve account?"In these times, both Schinke and Knetter said that reserve account is more important than ever. They said after building the reserve account up, people can then think about getting into the stock market."If it's your only $5,000, don't take so much risk," Knetter said. "But if it's your second or third or fourth $5,000 that you have to play with, it's a great time to be taking a little bit of a risk, in my opinion."The least risky investments are liquid assets -- like cash, checking and savings accounts and treasury bills. Experts said those types of investments are the ones you'll want to stick with if you want to make the least amount of risks.Buying a home or property would be on the opposite side of the spectrum. It is a buyer's market, but it is still considered a high-risk investment, although many say the housing market is beginning to rebound.And here's one final, but important, point -- as with any big money decision, one should always consult with a professional.
VIDEO: Watch The ReportInvesting has turned into gamble that not many want to risk, but many experts are saying that now's the time to get started, if you haven't already.So, if you had $5,000 to work with, what might be a good way to invest it in today's economy?University of Wisconsin-Madison School of Business Dean Michael Knetter said he'd stick to investments in the middle of the road."I would probably take a somewhat defensive and cautious position yet," Knetter said. "What am I doing? I'm getting my flat screen TV for $1,000, maybe I'm keeping $1,000 in something fairly liquid, and I'm putting $3,000 in the market and probably betting on the technology sector in the U.S. to really carry the day."But Knetter, and others, stressed that it all depends on the situation that you, as an individual or family, are in.Adam Schinke, of Thrivent Financial, said that before people make a risky roll of the dice on an investment, they should evaluate their current situation."The first thing I would say would be to pay off any outstanding credit card debt or balances that you have," Schinke said. "The second thing would be to reevaluate your emergency reserve account. Do you have that three to six months of expenses built up in that reserve account?"In these times, both Schinke and Knetter said that reserve account is more important than ever. They said after building the reserve account up, people can then think about getting into the stock market."If it's your only $5,000, don't take so much risk," Knetter said. "But if it's your second or third or fourth $5,000 that you have to play with, it's a great time to be taking a little bit of a risk, in my opinion."The least risky investments are liquid assets -- like cash, checking and savings accounts and treasury bills. Experts said those types of investments are the ones you'll want to stick with if you want to make the least amount of risks.Buying a home or property would be on the opposite side of the spectrum. It is a buyer's market, but it is still considered a high-risk investment, although many say the housing market is beginning to rebound.And here's one final, but important, point -- as with any big money decision, one should always consult with a professional. Copyright 2009 by Channel 3000. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
