With $1000, you can start investing in many mutual funds. Here is what I would suggest:
- Invest in a low expense ratio mutual fund. Find something that has a good 5 year track record, especially through the 2002 bear years. Use Yahoo’s mutual fund screener for your research.
- If you have more than $3000, one of the better “mutual fund” that I can recommend is BRK/B, the B share of Berkshire Hathaway, the company of Warren Buffett. You can only buy 1 share since each share is about $3000. I did a comparison of his company to S&P 500, and his record is simply super-outstanding. Berkshire Hathaway holds many valuable and diverse types of business. Therefore, I am willing to put it into the category of “mutual fund”. Besides, I believe BRK will outperform S&P 500 going forward.
- Buy some 1-ounce silver Eagle coins to just preserve your buying power.
With this amount of money, I would NOT invest in individual stocks or sector funds, both are too risky for a small amount of investable assets.
P.S. I added comments on Warren Buffett’s old age. Be sure to check it out.