18 great ways to spend $1,000

By Kiplinger's Personal Finance Magazine

Since the late 1980s, Kiplinger has offered readers ideas on how a little bit of money can accomplish a lot: fight poverty, finance an adventure or buy great stocks and funds. We go for a mix of the practical and interesting, and hopefully both.

This year we have some new ideas to make good use of $1,000.

Plus, we want to know how you would spend a grand. We're offering $1,000 to the person who can come up with the best way to spend or invest the money. Enter our contest with your suggestion to put that money to work -- or play. (Read about last year's winner.)

Check out our ideas:

Make a bet on 3 cheap stocks

Sometimes you want to invest just for fun. But when it comes to mad money, don't bet too much, and apply a little method to your madness.

One strategy is to pick down-on-their-luck stocks: companies that once traded for more and that have real revenues, even though profits are currently scant or nonexistent. You're betting that the market has overreacted, which is often a safe bet, and that a turnaround is just a couple of quarters away.

TiVo (TIVO, news, msgs) -- recent price $6 -- invented digital TV recording. Like Xerox and FedEx, its name has become a verb, so its brand recognition is strong.

But the stock has lagged because of fears that bigger communications powers will muscle the business away or force TiVo to spend its scarce reserves to defend its base of 4.4 million customers.

TiVo's counterattack includes selling advertising, launching a high-definition recorder and signing marketing deals with Comcast and other media companies. TiVo first offered its stock at $16 in 1999, but at $6, it's worth a shot.

UQM Technologies (UQM, news, msgs) -- recent price $4 -- takes parts for electric-vehicle motors and performs contract electric-propulsion research.

It's a tiny company, with annual revenue below $10 million, but product sales rose 53% last year, and contract-research revenue rose 37%. UQM's idea is to help develop electric-powered motors for heavy trucks, military vehicles and off-road SUVs. The company is speculative because it's small and loses money, but it has good customers, including the U.S. government and Air Force, and the numbers are moving in the right direction.

Omnova Solutions (OMN, news, msgs) -- recent price $6 -- makes, among other things, simulated marble and granite countertop surfaces. If you've looked at replacing a Formica countertop recently, you know that such synthetic-stone surfaces are all the rage. The company swings from small profits to small losses, but its financial picture is improving.

As for our $1,000 low-price stock picks last year, we called two out of three: Design Within Reach (DWRI, news, msgs) rose from $5 to $6, and Hanger Orthopedic Group (HGR, news, msgs) was up from $7 to $12. Phoenix Footwear (PXG, news, msgs) was a loser, dropping from $5 to $2.75.

Other ways to invest in your future:

Land nice yields

Ease yourself into overseas stocks

Add glitter to your portfolio

Start small with top stock pickers

Continued: Earn 18%

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