No. of Recommendations: 4
First time investor, $2000-3000.
I'd have you visit www.treasurydirect.gov. This is the direct to the consumer,treasury bond site. You would be loaning money to the US government. They aren't paying much, but it is money, and it lets you see how the system works. Start with perhaps a one-year treasury bill, or perhaps a 5-year note. The bill is sold at a discount and redeemed at face. If you buy a note, they pay interest directly into your bank account every six months. There is no broker involved and no trading costs. The bond will not default unless the government goes belly up, in which case your other investments wouldn't be worth much,either. You can buy in increments of $1000.
Currently interest rates are low, and at some point they will rise. Therefore I would have nothing to do with a bond fund right now. Get a BOND, not a fund, and hold to maturity. Therefore you don't want a long maturity. While it is earning some interest, you can be studying. Later you may want to get some municipal bonds, issued by your state or community--those are in increments of $5000 so you aren't yet in the market for them. Or perhaps a corporate bond. As long as you get a BONDd and hold it to maturity, you will get your money back with some interest. If you get a bond fund, you well may not get your money back as interest rates rise.
Best wishes, Chris and welcome to the board!
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