The reason you should invest in SPY is because it is highly liquid and a very inexpensive way to invest in the stock market w/o taking individual stock risk. In addition, if you don't need the money anytime soon, then any short-term pullback in the market should not be of great concern.
As others have said though, this is a hard question w/o knowing more about your situation. ALWAYS have at least 3 months of living expenses in a savings account (preferably money market) to guard against unforseen expenses.
The FED recently announced that it will start buying treasuries to keep interest rates low. So I think we're heading for 3.0% rates on the 30-yr mortgage and 1.25% rates on the 10-yr treasury. I think these low rates will persist for many many years just like Japan has been suffering from.
With that in mind, I just opened up a CD account with a 3.5% APY and a 10-year term at discoverbank.com.
Write a 5,000 dollar check, made payable to "CyRocksMyPants"....
Open up a Roth IRA
i second hookers and blow.
Life insurance can be a great investment, and I'm not talking about Term Life. A lot of people just need to be able to look at the vehicle differently than it is most commonly viewed. There are products out there (Cash Value Guaranteed Death Benefit, index products, etc.) that really should be explored, especially for those just graduating from college. There is a great likelyhood Social Security will not be there for you, so it's probably a good idea to look at investments you can use for retirement. There are some pretty sweet life insurance products out there.
Just so you know...it may sound like it, but I AM NOT A LIFE INSURANCE AGENT. Just know the industry has created quite a lot of new and interesting products in recent years.
Do a dividend reinvestment program in a High Yield Bond ETF through Ameritrade or Etrade.
8% yield at historically low rates. (just have to be open to a little interest rate volatility over the next 2 years)
$5,000 yields $33.33 a month back into the principal, and on and on and on.....
Donations to current students :wink: :jimlad: