K, well what country are you in? Why not go with the market return rate? Something along the lines of a basket etf, or something indexed to the markets as a whole. SPY, QQQ, etc. You can expect reasonable returns that average either at market or above market net, and if you're long-term you can keep adding to it in increments. Try to keep your broker fees to 1% or less for the total transaction (i.e. Broker fees are $10, then 1% of $1000 = $10). I only say etf's because assuming he also wants to maximize potential returns, you don't really have enough to diversify and overcome the hole you'd be digging by buying multiple assets. That is just my 2 cents, and should not be taken as a buy recommendation. Etf's come in all varieties, especially in American markets where there is an etf for everything. Stocks are also an option, but way more risk exposure to market climates. You can't really go beyond etf's and stocks, because it just gets inherently more riskier when you get into options trading and margin accounts.

With $2500, a mutual fund is too expensive. You can find exceptions to everything, but generally your MER will eat up any modest gains, and that's just assuming the upcoming economic climate won't be turbulent. Plus if there are front or backend fees, the returns you net from 2500 might not cover it. It would be beneficial if that fits your time horizon though, and you kept adding to it in chunks, but it's up to you. CD's are safe, assuming you believe in the government/institution you are purchasing from. Bonds/CD's are the snail in this race, if you want safe assets with little liquidity. Keeping it in cash for long term will net you losses. Inflation is a bitch, and if you are in USD right now there is an upcoming storm ahead in October. Regardless of forex markets, currencies aren't the safe havens they used to be.