In this article I am going to talk about how to you can invest 10,000 depending on your personal circumstances.
The best way to invest $10,000 depends on your current financial situation. For example I would suggest a millionaire who is willing to take a big risk with $10,000 invests it very differently to a person whose life savings come to $10,000 and they do not want to take much of a risk with it.
First of all, if you are the conservative person and your main priority is capital preservation, putting your money in a high interest savings account is probably your best option. There is no real risk to it there.
If you would like to take a little risk, you could consider investing at least a proportion of the money into blue chip stocks. These are stocks in companies that are well established and have a solid proven track record. Examples of these type of stocks include Walmart and the oil company Exxon Mobil.
The proportion of the money you put into stocks is up to you. The higher the proportion, the greater the risk you are taking. However, the risk is still going to be relatively low, as blue chip stocks are probably the safest stocks you can buy.
If you are prepared to take a moderate amount of risk with your money, one option is to invest some of the money in blue chip stocks and some of the money in small and medium cap stocks. These stocks tend to be more volatile and bigger profits and losses can occur quickly.
Large Cap stocks have a market capitalization of more than $5 billion. Medium Cap stocks are those that have a market capitalization between $1 billion and $5 billion.
For those seeking higher risk and returns, there is the option of investing in small cap stocks or even penny stocks. Small cap stocks have a market capitalization of less than $1 billion. There are many definitions of penny stocks, but the one offered by the SEC states that any stock priced less than $5 is a penny stock.
These stocks are extremely high risk. Very large price movements can occur in a short period of time. If you decide you would like to invest in these stocks, be sure you do your homework and get a good price.
No matter how much risk you want to take, one of the best ways to invest $10,000 is with a good broker. Trading commissions can vary widely between brokers. You definitely want to get the best deal possible for your style of trading. If you are looking to trade small cap stocks, it might be worth you visiting my penny stock brokers page or if you are looking for a general low cost broker, there’s the discount stock brokers page.