Tax refunds are to average $2,300 this year according to the IRS reports, and Americans will get hold of some extra cash that can flow into various investments. A fee-only financial planner or registered investment adviser can help you cope with this sudden inflow of funds. Pick a professional who is legally required to act in your best interest, as brokers are often pushing proprietary products to consumers and often lack training to provide financial advice.

Real estate remains a bright spot for investors seeing the average U.S. home prices add 11.17 percent from the fourth quarter of 2003 through December of the last year. However, there may be too many people eager to lay hands on this spectacular growth, and the housing bubble has long been lurking on the market outskirts. However, with 30-year mortgage rates rising for seven weeks in a row before taking a dip to 5.93%, growth in home prices may soon slow down.

A mutual fund may be a better option as it is much more liquid than property. However, there is a danger for returns here as well: according to Jack Bogle, the founder of the Vanguard Group, stock mutual fund gross annual return averaged 13 percent from 1984 through 2004, which boils down only to 5.4 percent after the subtraction of taxes, expenses and inflation. The S&P 500 Index fund, in contrast, would have returned 9% in the same period. Active management expenses, according to Bogle, can consume 2.5% of your returns.

Diversification remains important to one’s investment strategy, and a good combination of US ans international equities plus a diversified bond fund remains the key to safe investment. Other ways to make wise use of one’s money can be putting money in college plans or start a new financial plan.