What to do with a thousand dollars is a question asked my many of us especially those who are beginning to invest. The first thing we should do is to avoid individual stocks because they need more than a thousand dollars to manage them.

We should think of how to put the money in a managed mutual fund. The traditional mutual funds did not give much but we have others known as the exchange traded funds or the ETFs that are more appropriate to use today. Most ETFs are able to locate indexes that show the action of a specific market segment such as the energy stocks. Making money using the ETFs needs us to predict the market segments that will outperform over the investment period. A qualified fund manager can be hired because they have more access to ideas and many have analysts that aid in the task. Mutual funds may also underperform but this can be avoided by getting a fund manager who has a reputation of beating the market.

A track record of instability is very important as the overall returns. This is because best funds may have good and bad times. For instance, we may put a thousand dollars in an unstable fund and it ends up hitting a dry spell so the dollars will start shrinking. In such a case, we should post security like most investors do before the dollars get finished. The mutual funds are not equal and many may underperform; so caution must be taken.