Investing for children?

Question

What would be some good stocks to invest for a child that they would hold onto till they reach middle age ?

Answer 1

Rather than individual stocks, I believe a better alternative would be a mutual fund. PENNX for example has returned about 14% annually for the last 25 years. Not too many funds can match that record but there are some. A closed end fund that you buy like a stock can GAM, about 16% annually since 1979.

Answer 2

I would strongly encourage you to first think about how the funds would be legally structured before deciding on any particular investment. I'm assuming that since you are contemplating a long term investment for your children that you are debt free including no mortgage debt, have a fully funded retirment account, and have your children's college education fully funded as well. Only then should you contemplate such an investment. Assuming the above is all taken care of, I would strongly encourage you to contact an attorney to set up a trust fund to hold the investments. The reason is to ensure that the funds are handled and used as intended..if you simply make investments in your children's name they can typically take control of the assets once they turn the age of majority which is either 18 or 21 depending on the state you live in....with a very simple trust you can designate a trustee and successor trustee, set strict investment guidelines for the trustee to follow (what investments are acceptable to be purchased), dictate at what age your child can take distributions and or take over the trust etc......Once that's in place I would suggest that the trustee allocate the funds accordinglly with a higher percentage in stocks (90-100%) vs. bonds or cash and decreasing the stock exposure and increasing the bond/cash exposure as your children get closer to middle age. For the stock holdings, I would lean more towards large blue chip stocks such as Johnson and Johnson, GE, Wells Fargo etc....

Answer 3

life insurance - especially whole life - a terrible investment that should not even be considered. Only Savings bonds worse. A classic closed end fund like ADX or PEO which both sell at a discount to asset value are a far better long term choice. Have held both over 20 yrs. Low expenses & you start with a discount.

Answer 4

McDonald's (MCD), Disney (DIS), General Electric (GE)

Look for stocks of companies that are blue chip or of what interests your kids - that way they can take an active role in the investment.

Answer 5

One of the best ideas is to buy your young child a small permanent life insurance policy. Its really affordable, they have it forever, and it builds cash value throughout the life of the policy ask your insurance agent about it

Answer 6

Buy an ETF like SPY or QQQQ. Most mutual funds do not beat SPY over the long haul.

Answer 7

If you are investing less than $2,000.00 USD initially then I suggest AMEX:DIA.