mheusser,

You wrote, I like silver, but the conversion cost is crazy. You buy at too much over the spot price, and sell at too little. Plus it's hard to carry. I might invest $1K as a hedge, but that leaves 9K.

You could buy a silver ETF such as SLV. It's much lighter and the carrying cost is just 0.50%/year. Transactional costs are the same as buying or selling any stock - $7 in or out at Scottrade.

Also, I have similar concerns about social good lending sites. I might risk $500USD in Kiva just to be a good citizen.

Unless you're willing to loose it all, I wouldn't touch something like Kiva.

Also, My timeline for the money right now is 6 months-2 years. If I put it in a CD, I'll get about 0.5% (one half of one percent) and lose money relative to inflation and cost of living.

With such a short timeline, you probably can't afford to do "normal" bond investing. The odds of experiencing a capital loss that is larger than your interest received is just too great. Buying individual bonds is also a risk, given you have so little capital during this time frame.

If you really need the money back in 6 to 24 months, I'd put it into either a 5-year Ally Bank CD or maybe an I-bond through Treasury Direct. Ally charges a 60-day interest penalty when you break a CD with them. Since the 5-year CD has been about twice their savings account rate, you tend to break even around month 4. Given their current rate of 1.74% APY, holding for 6 months would give you about a 1.16% APY; 24 months would yield about 1.45% APY.

An I-bond gets you basically a return matching the published CPI rate for the previous 6 month period. That is currently at 3.06% APY, but it changes in May. However, I-bonds cannot be cashed in the first 12 months. There is a limit of $10,000 purchased in a calendar year. And you will forfeit the last 3 months of interest if you redeem the bonds before the first 5 years.

Now if you can risk loosing some of your investment, there are other other investments out that that *might* do better... But I'll leave it up to others to discuss their merits.

However, matching or exceeding the CPI on any investment that exceeds the CPI is probably going to incur significant capital risk for such a short time frame.

Finally, That leaves me, I think, with purchasing a muni or business bond. Does anybody have any idea how to actually do that? I've heard I can do it through Scottrade, where I have an account, but the process seems byzantine.

I've purchased bonds at Scottrade. I don't know if they've improved the platform or the spreads; but from my experience, I cannot recommend it. Scottrade is a good, inexpensive stock platform. So you can also buy ETFs, CEFs and preferreds at a reasonable price - though they refuse to accept online orders for a number of preferreds, making you pick up the phone to call your local office. I think that if you're planning to get seriously into fixed income, you will probably want to open an account with a different broker.

- Joel