Having just returned from serving with the U$.$S$.$ Marines in Afghanistan, Nolan has managed to save most of his earnings. He has enrolled in the local community college and he is back living with his parents while he assimilates back into U$.$S$.$ life. As his business major friend, Nolan has come to you for advice. He would like to see his $$40,000$ savings grow, yet he knows that he will need it in about five years when he and his girlfriend are out of school and make plans to get married. He also worries that his car may break down and he will need to invest in another used car. What would you suggest for Nolan?

Multiple Choice

Nolan is still young. He needs to consider high$-$growth, higher$-$risk stocks and corporate bonds. He is young enough to recoup his investment if it should experience a loss.

In order for Nolan to see growth, he will need to place the entire $$40,000$ in one stock offering. You suggest a biotech stock that promises growth.

Nolan should determine what types of companies he is passionate about. He should lead with his heart but should be warned that some of those companies will produce better yields than others.

Since liquidity is a concern, Nolan would do best to diversify into four to eight different investments, and keep a reasonable amount in cash $($a savings account$)$ for emergencies.