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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Need advice on investing.  DH and I come from dirt poor families and have managed to save 120k over the course of our 20s and early 30s.  It is sitting in the bank currently and we would like to invest it in something that yields more than the pittance banks are currently paying.  At the same time, we hope to buy a house in the next two years.  (We live in a ridiculously expensive area, so we still don't have enough for a downpayment on anything that can fit our family of 4).

We know little about savings and investments.  We know enough not to put this in the stock market because this is all we have in the world, apart from retirement savings.  I was thinking that a mutual fund makes sense, but are some riskier or better than others?  I have heard of Vanguard, but there are multiple Vanguard funds.  Are there low risk options other than mutual funds that still generate a decent return?  Or should we keep it in cash.

TIA.[/quote]

If you don't need the money anytime soon and if you don't want to actively manage, I'd say look into some sort of Index funds - put it in and let it sit. But, in your case, I'd not put that money in stocks. Try Ally bank - at least their rate is close to 1 % for savings and slightly lower for checking. I know it's nothing but sure better than local banks. [/quote]

Would you mind explaining what an index fund is and how to choose a good one?[/quote]

http://www.investopedia.com/terms/i/indexfund.asp

check this out. simple definition... keep in mind, index funds have lower risks than typical stocks, risk is still there. not a good idea to "play" with money you know you will absolutely need. [/quote]

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