Are there any other investing methods I should look into?
401Ks and IRAs are types of retirement accounts. They have rules regarding maximum amount of investments per year; who can invest; destructibility; and the tax treatment of the growth.  Stock, bonds, mutual funds, ETFs are all types of investments that can exist either inside or outside of the retirement account. Some 401Ks restrict the type of investments you can have, others allow you to own almost anything. Any investment is a risk, and there is no guarantee that it will grow.  Look around the site for beginning investment advice. You should start with the 401K offered by your company especially if they have matching funds. That is free money. Many suggest you invest enough to get the match, then invest with an IRA. Look into IRAs because under US tax law you can still make a 2013 investment up until tax day 2014. Take the time before tax day to decide on Roth or Regular IRA.   The more exotic investments take more time to understand and should not be a concern until you have laid out your basic retirement accounts. To expand on mhoran's answer - Once you mention the 401(k), we're compelled to ask (a) what is the match, if any, and (b) what are the expenses within the funds offered.  Depositing to get the full match is going to get you the biggest return on your money. It's common to get a dollar for dollar match on the first 5 or 6% of your income. If the fees are high, you stop at the match, and move to an IRA for the next money you wish to save.  At 22, I'd probably focus on the Roth. If you have access to a Roth 401(k), that's great, the match will be pre tax dollars and you'll get started with a decent tax status mix.  These accounts can form the core of your investing. Most people have little left over once their retirement accounts are fully funded. And yes, reading to understand stocks is great, but also to understand why stock indexing is the best choice for most investors.
CDs may be one good option if you have a sense of when you may need the money(-ish), especially with more generous early withdrawal penalties. You can also take a look at investing in a mix of stock and bond funds, which will lower you volatility compared to stocks, but increase your returns over bonds. "Here's what I suggest... A few years ago, I got a chunk of change.  Not from an inheritance, but stock options in a company that was taken private.  We'd already been investing by that point.  But what I did: 1.  I took my time. 2.  I set aside a chunk of it (maybe a quarter) for taxes.  you shouldn't have this problem. 3.  I set aside a chunk for home renovations. 4.  I set aside a chunk for kids college fund 5.  I set aside a chunk for paying off the house 6.  I set aside a chunk to spend later 7.  I invested a chunk.  A small chunk directly in single stocks, a small chunk in muni bonds, but most just in Mutual Funds. I'm still spending that ""spend later"" chunk.  It's about 10 years later, and this summer it's home maintenance and a new car...  all, I figure it, coming out of some of that money I'd set aside for ""future spending.""" "Your only real alternative is something like T-Bills via your broker or TreasuryDirect or short-term bond funds like the Vanguard Short-Term Investment-Grade Fund.  The problem with this strategy is that these options are different animals than a money market. You're either going to subject yourself to principal risk or lose the flexibility of withdrawing the money. A better strategy IMO is to look at your overall portfolio and what you actually want. If you have $100k in a money market, and you are not going to need $100k in cash for the forseeable future -- you are ""paying"" (via the low yield) for flexibility that you don't need. If get your money into an appropriately diversified portfolio, you'll end up with a more optimal return. If the money involved is relatively small, doing nothing is a real option as well. $5,000 at 0.5% yields $25, and a 5% return yields only $250. If you need that money soon to pay tuition, use for living expenses, etc, it's not worth the trouble." "Most articles on investing recommend that investors that are just starting out to invest in index stock or bonds funds.  This is the easiest way to get rolling and limit risk by investing in bonds and stocks, and not either one of the asset classes alone.   When you start to look deeper into investing there are so many options: Small Cap, Large Cap, technical analysis, fundamental analysis, option strategies, and on and on.  This can end up being a full time job or chewing into a lot of personal time.  It is a great challenge to learn various investment strategies frankly for the average person that works full time it is a huge effort.  I would recommend also reading ""The Intelligent Asset Allocator"" to get a wider perspective on how asset allocation can help grow a portfolio and reduce risk.  This book covers a simple process." There are strategies based on yields. Dogs of the Dow being a specific example while Miller Howard has a few studies around dividends that may be of use if you additional material. Selling off a portion of the holding can run into problems as how could one hold 10 shares, selling a non-zero whole number every year for over 20 years if the stock doesn't ever pay a dividend in additional shares or cash? For a non-technical investor (meaning someone who doesn't try to do all the various technical analysis things that theoretically point to specific investments or trends), having a diverse portfolio and rebalancing it periodically will typically be the best solution. For example, I might have a long-term-growth portfolio that is 40% broad stock market fund, 40% (large) industry specific market funds, and 20% bond funds.  If the market as a whole tanks, then I might end up in a situation where my funds are invested 30% market 35% industry 35% bonds.  Okay, sell those bonds (which are presumably high) and put that into the market (which is presumably low).  Now back to 40/40/20.   Then when the market goes up we may end up at 50/40/10, say, in which case we sell some of the broad market fund and buy some bond funds, back to 40/40/20.  Ultimately ending up always selling high (whatever is currently overperforming the other two) and buying low (whatever is underperforming).   Having the industry specific fund(s) means I can balance a bit between different sectors - maybe the healthcare industry takes a beating for a while, so that goes low, and I can sell some of my tech industry fund and buy that.   None of this depends on timing anything; you can rebalance maybe twice a year, not worrying about where the market is at that exact time, and definitely not targeting a correction specifically.  You just analyze your situation and adjust to make everything back in line with what you want. This isn't guaranteed to succeed (any more than any other strategy is), of course, and has some risk, particularly if you rebalance in the middle of a major correction (so you end up buying something that goes down more).  But for long-term investments, it should be fairly sound. I think you are right. I hear people all the time with horror stories about futures and trading horror stories in general. I want to learn about this market, but I don't want to go in without some education on the matter. I watched their video on options on futures, but the valuation method needs a bit more explaining to be (beta, gamma, etc.). I get the basic idea of options on futures, but I need to formulate a strategy, and that is where study would come in.   I have wanted to play around with a few strategies I had in my head for regular options, and by the time I get the grasp of it, I might be able to trade options on futures. I guess my biggest thing with options on futures is not to be sophisticated, but more so I can have access to new markets. On the topic of options though, I do think there is some strategies that could boost my returns a bit on my existing strategies. I think selling various options (selling call options on weak dividend stocks stuck as bulk shipper or mortgage reits and as of late oil trusts or selling put options on some stronger oil reits or other stronger dividend stocks). The only problem is I don't know if the premium would be enough to make it worth while with the weak dividend stocks. So either way, even if you are only earning a conservative 9% on dividends, if you add in another 4% for premium, you could be making 13% off of one trade, and could repeat the process (assuming the target stayed weak or strong). Very interesting. I would like to expand beyond just precious metals and stocks, but I am not ready just to jump in just yet (I am a relatively young investor, but have been playing around with stocks for 4 years on and off). The problem I often find is that the stock market is often too overvalued to play Ben Graham type strategy/ PE/B, so I would like to expand my knowledge of investing so I can invest in any market and still find value. After reading Jim Rogers, I was really interested in commodities as an alternative to stocks, but I like to play really conservative (generally). Thank you for your insight. If you don't mind, I would like to add you as a friend, since you seem quite above average in the strategy department. "There are many questions and good answers here regarding investment choices. The first decision you need to make is how involved do you intend to be in investment activity. If you plan to be actively investing by yourself, you should look for questions here about making investment choices. If you intend to be a more passive investor, look for posts by ""Bogleheads"", who focus on broad-focused, low cost investments. This is the optimal choice for many people. If you are not comfortable managing investments at all, you need to figure out how to find a competent and reasonably priced financial advisor to meet with and guide your investment strategy. This advice generally costs about 1-2% of your total managed assets annually." You can use a tool like WikiInvest the advantage being it can pull data from most brokerages and you don't have to enter them manually. I do not know how well it handles dividends though. "I'm 39 and have been investing since my very early 20's, and the advice I'd like to go back and give myself is the following: 1) Time is your friend. Compounding interest is a powerful force and is probably the most important factor to how much money you are going to wind up with in the end. Save as much as you possibly can as early as you can. You have to run twice as hard to catch up if you start late, and you will still probably wind up with less in the end for the extra effort. 2) Don't invest 100% of your investment money It always bugged me to let my cash sit idle in an investment account because the niggling  notion of inflation eating up my money and I felt I was wasting opportunity cost by not being fully invested in something. However, not having enough investable cash around to buy into the fire-sale dips in the market made me miss out on opportunities. 3) Diversify The dot.com bubble taught me this in a big, hairy painful way. I had this idea that as a technologist I really understood the tech bubble and fearlessly over-invested in Tech stocks. I just knew that I was on top of things as an ""industry insider"" and would know when to jump. Yeah. That didn't work out so well. I lost more than 6 figures, at least on paper. Diversification will attenuate the ups and downs somewhat and make the market a lot less scary in the long run. 4) Mind your expenses It took me years of paying huge full-service broker fees to realize that those clowns don't seem to do any better than anyone else at picking stocks. Even when they do, the transaction costs are a lead weight on your returns. The same holds true for mutual funds/ETFs. Shop for low expense ratios aggressively. It is really hard for a fund manager to consistently beat the indexes especially when you burden the returns with expense ratios that skim an extra 1% or so off the top. The expense ratio/broker fees are among the very few things that you can predict reliably when it comes to investments, take advantage of this knowledge. 5) Have an exit strategy for every investment People are emotional creatures. It is hard to be logical when you have skin in the game and most people aren't disciplined enough to just admit when they have a loser and bail out while they are in the red or conversely admit when they have a winner and take profits before the party is over. It helps to counteract this instinct to have an exit strategy for each investment you buy. That is, you will get out if it drops by x% or grows by y%. In fact, it is probably a good idea to just enter those sell limit orders right after you buy the investment so you don't have to convince yourself to press the eject button in the heat of a big move in the price of that investment. Don't try to predict tops or bottoms. They are extremely hard to guess and things often turn so fast that you can't act on them in time anyway. Get out of an investment when it has met your goal or is going to far in the wrong direction. If you find yourself saying ""It has to come back eventually"", slap yourself.  When you are trying to decide whether to stay in the investment or bail, the most important question is ""If I had the current cash value of the stock instead of shares, would I buy it today?"" because essentially that is what you are doing when you stick with an investment. 6) Don't invest in fads When you are investing you become acutely sensitive to everyone's opinions on what investment is hot and what is not. If everyone is talking about a particular investment, avoid it. The more enthusiastic people are about it (even experts) the MORE you should avoid it. When everyone starts forming investment clubs at work and the stock market seems to be the preferred topic of conversation at every party you go to. Get out!  I'm a big fan of contrarian investing. Take profits when it feels like all the momentum is going into the market, and buy in when everyone seems to be running for the doors." A lot of people here talk about shorting stocks, buying options, and messing around with leveraged ETFs. While these are excellent tools, that offer novel opportunities for the sophisticated investor, Don't mess around with these until you have been in the game for a few years. Even if you can make money consistently right out of the gate, don't do it. Why? Making money isn't your challenge, NOT LOSING money is your challenge. It's hard to measure the scope of the risk you are assuming with these strategies, much less manage it when things head south. So even if you've gotten lucky enough to have figured  out how to make money, you surely haven't learned out how to hold on to it. I am certain that every beginner still hasn't figured out how to comprehend risk and manage losing positions. It's one of those things you only figure out after dealing with it. Stocks (with little to no margin) are a great place to learn how to lose because your risk of losing everything is drastically lower than with the aforementioned tools of the sophisticated investor. Despite what others may say you can make out really well just trading stocks.  That being said, one of my favorite beginner strategies is buying stocks that dip for reasons that don't fundamentally affect the company's ability to make money in the mid term (2 quarters).  Wallstreet loves these plays because it shakes out amateur investors (release bad news, push the stock down shorting it or selling your position, amateurs sell, which you buy at a discount to the 'fair price'.) A good example is Netflix back in 2007. There was a lawsuit because netflix was throttling movie deliveries to high traffic consumers. The stock dropped a good chunk overnight.  A more recent example is petrobras after their huge bond sale and subsequent corruption scandal. A lot of people questioned Petrobras' long-term ability to maintain sufficient liquidity to pay back the loans, but the cashflow and long term projections are more than solid. A year later the stock was pushed further down because a lot of amateur Brazilians invest in Petrobras and they sold while the stock was artificially depressed due to a string of corruption scandals and poor, though temporary, economic conditions. One of my favorite plays back in 2008-2011 was First Solar on the run-up to earnings calls. Analysts would always come out of these meetings downgrading the stock and the forums were full of pikers and pumpers claiming heavy put positions. The stock would go down considerably, but would always pop around earnings. I've made huge returns on this move. Those were the good ole days. Start off just googling financial news and blogs and look for lawsuits and/or scandals. Manufacturing defects or recalls. Starting looking for companies that react predictably to certain events. Plot those events on your chart. If you don't know how to back-test events, learn it.  Google Finance had a tool for that back in the day that was rudimentary but helpful for those starting out. Eventually though, moreso than learning any particular strategy, you should learn these three skills: 1) Tooling: to gather, manipulate, and visualize data on your own.  These days automated trading also seems to be ever more important, even for the small fish. 2) Analytical Thinking learn to spot patterns of the three types:  event based (lawsuits, arbitrage, earnings etc), technical (emas, price action, sup/res), or business-oriented (accounting, strategy, marketing). Don't just listen to what someone else says you should do at any particular moment, critical thinking is essential. 3) Emotions and Attitude: learn how to comprehend risk and manage your trigger finger. Your emotions are like a blade that you must sharpen every day if you want to stay in the game. Disclaimer: I stopped using this strategy in 2011, and moved to a pure technical trading regime. I've been out totally out of the game since 2015. "If you want a ~12% rate of return on your investments.... too bad. For returns which even begin to approach that, you need to be looking at some of the riskiest stuff. Think ""emerging markets"". Even funds like Vanguard Emerging Markets (ETF: VWO, mutual fund, VEIEX) or Fidelity Advisor Emerging Markets Income Trust (FAEMX) seem to have yields which only push 11% or so.  (But inflation is about nil, so if you're used to normal 2% inflation or so, these yields are like 13% or so. And there's no tax on that last 2%! Yay.) Remember that these investments are very risky. They go up lots because they can go down lots too. Don't put any money in there unless you can afford to have it go missing, because sooner or later you're likely to lose something half your money, and it might not come back for a decade (or ever). Investments like these should only be a small part of your overall portfolio. So, that said... Sites which make investing in these risky markets easy? There are a good number, but you should probably just go with vanguard.com. Their funds have low fees which won't erode your returns. (You can actually get lower expense ratios by using their brokerage account to trade the ETF versions of their funds commission-free, though you'll have to worry more about the actual number of shares you want to buy, instead of just plopping in and out dollar amounts). You can also trade Vanguard ETFs and other ETFs at almost any brokerage, just like stocks, and most brokerages will also offer you access to a variety of mutual funds as well (though often for a hefty fee of $20-$50, which you should avoid). Or you can sign up for another fund providers' account, but remember that the fund fees add up quickly.  And the better plan? Just stuff most of your money in something like VTI (Vanguard Total Stock Market Index) instead." You don't say what kinds of mutual funds, or what bonds. You don't say how old you are. You seem to have enough cushion to strike out on your own comfortably.  This is good. Compared with Vanguard's management fees, the fees you're paying are pretty high. The bottom line of what to invest in rests with you.  If you outsource it, it's still your money.  The managers get paid whether you make money or not. You have lots of other options: real estate from a distressed seller, commodities, currencies, websites, or other things where you have a knowledge advantage. For the time being, though, if you're concerned about your main income stream, I wouldn't get terribly risky with your money.  Cash is just peachy in that case. "I don't know really is the best investment strategy. People think that they have to know everything to make money. But realistically, out of the hundreds of thousands of publicly traded securities, you really can only invest in a tiny number of them. Of the course of a week, you literally have more than a million ""buy"" or ""don't buy"" decisions, because the prices of those securities fluctuate every day.  Simply due to the fact that there are so many securities, you cannot know what everything is going to do. You have to say ""I don't know"". Also, when you do understand something, it is usually fairly priced. So will you make money on it? ""I don't know"". Only very rarely will you find something that you actually understand well and it is significantly undervalued. You can be looking at a company a day for two years before you find it. But people get trigger happy. They bet on 51%/49% odds when they should only bet on 90%/10% odds or higher.  If you are forced to bet on everything, it makes sense that you bet on everything you believe is greater than 50% chance of winning. But since you cannot bet on everything, you should only bet on the highest quality bets, those with greater than 90% chance of winning. To find such a bet, you may have to shuffle through 100 different companies and only make 2-3 bets. You are looking for something that is at least 2 standard deviations away from the mean.  People are not good at doing a lot of work, most of which yields nothing, to find one big payoff. They are wired to only look at the present, so they take the best bet they can see at the moment, which is often barely above 50% (and with any misjudgment, it may actually be well below 50%). And people are not good at understanding compound/geometric growth. You can keep multipling 10% gains (1.10 * 1.10 * 1.10 ...), but that can all be wiped out by multiplying by one zero, which is why taking a 51%/49% bet is so dangerous (even though technically it is an advantageous one). They forget to adjust for the geometric aspect of compounding. A 99%/1% bet is one you should take, but if you are allowed to repeat it and you keep going all-in, you will eventually lose and have $0, which is the same as if you took a single all-in bet that has 0% chance of winning.  As Buffett says, if you are only allowed to make 20 investments over a lifetime, you will most likely do better because it prevents you from making many of these mistakes."