How I'd Invest $20,000 Today if I Had to Start From Scratch
If you find yourself with a lump sum of cash and consider investing it, pat yourself on the back because you're on the right track. Making good investing decisions in the short term can oftentimes pay off tenfold in the long term, so it's important that you're intentional with your investments. Here's how I'd invest $20,000 if I had to start from scratch.
A good portion of the $20,000 would undoubtedly go into an S&P 500 index fund. Consisting of the 500 largest American companies, an S&P 500 fund is home to some top large-cap stocks (including blue-chip) and is what I consider a staple in any investment portfolio. An S&P 500 fund would also achieve one of the key pillars of investing: diversification. A fund like the iShares Core S&P 500 ETF (NYSEMKT: IVV), for example, spans the following industries:
You never want your investments to be too reliant on a particular company or industry, and an S&P 500 fund offers both types of diversification.
Source Fool.com
