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How do you get started investing for your kids?

I'd like to start buying stocks for the kids. What is best way to get started.


Asked by Anonymous at 10:47 PM on Mar. 3, 2010 in Just for Fun

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Answers (5)
  • Anon :09 here again. If your children are young, you can afford to go with riskier investments (for example, stock mutual funds) because they have SO much time for the market to recover, and when it does, it'll pay off big for them. In a down market like this, the smart investors are buying stock dirt cheap. It's the dumb investors that wait until the market is hitting new highs before buying stock at top dollar. But again, use a mutual fund - don't buy individual stock. A mutual fund will get you a virtual basket of stock which lowers your overall risk. Many advisors will recommend American Funds, Franklin Templeton, etc. - stay away from proprietary funds (funds owned by the company that is advising your financial decisions) as the advisor is usually getting a bigger kickback by recommending them and there is then a bias that may go against you.

    Answer by Anonymous at 1:15 AM on Mar. 4, 2010

  • If you want to buy them you can try Charles Schwab but I'd go with a company like Smith Barney or someone who does know what they are doing and who have a good return (for the most part). In this economy, I'd consider skipping stocks (or having a very diversified portfolio including mutual funds) and doing a CD with a 3-4 percent return. You can also do the 529 plan. Good luck.

    Answer by Anonymous at 11:06 PM on Mar. 3, 2010

  • Have you invested in stocks for yourself? Not to advise you to be selfish but if you haven't been successful at investing for yourself how are you going to succeed at doing it for your kids? Get some experience under your belt first for a few months and then copy what you did with theirs. You can begin by googling Mock stock simulators. hth

    Answer by Anonymous at 11:25 PM on Mar. 3, 2010

  • why dont you try bonds? each month, or for birthdays?

    Answer by mrsjosey1018200 at 11:52 PM on Mar. 3, 2010

  • Okay, I wouldn't just go out and start picking stocks out of a hat - BAD IDEA! First, have you thought about starting a college savings account? If you don't want to go that route, or if you are afraid your kids aren't going to attend college (most plans can be transferred from child to child so if one doesn't go, you can re-assign it to a child that does), I'd HIGHLY recommend going and talking briefly to a financial advisor. I know, I used to be one. Look at setting up an IRA - yes, kids can have IRAs - and begin investing in some high-quality mutual funds. IRAs are taxed much better - Roth specifically. Mutual funds give you the diversity you need right off the bat so you can lower your risk with a high potential return.

    If you get nothing else out of my answer, let it be this: Don't try to go about this on your own. That is how people get buried and lose their a$$es. Leave it up to the professionals. Seriously.

    Answer by Anonymous at 1:09 AM on Mar. 4, 2010