What are the better investments for benefiting grandchildren six yrs., and under?
Animaholic asked:
I want to invest some funds for my three grandchildren, and any other future grandchildren. I am looking into stocks instead of items such as bonds, savings, or trust etc. What experienced person can help me with making a wise move on this subject?
I want to invest some funds for my three grandchildren, and any other future grandchildren. I am looking into stocks instead of items such as bonds, savings, or trust etc. What experienced person can help me with making a wise move on this subject?
proscunio:
buy them a Bible
January 7, 2009, 10:30 pmderek:
Interview a few financial advisors and go with the one that you feel best about. Trust your instincts.
Ask them for a proposal and recommendations.
January 9, 2009, 9:14 amJake:
The answer is that it depends. If you are trying to save for college, then you need a 529. If you are simply looking to gift the money at some point in the future, then you need a trust. Either way, stocks are very risky, and you would need a number of them to be truly diversified and hedge your losses. Some of the more stable investments that still provide a reasonable return are mutual funds, municipal bonds (because of the tax savings), and real estate. The stock market itself has had an average growth rate of 11.8% per year for the entire life of the market. That’s averaging every stock’s ups and downs to result in a net increase of 11.8% annually. If you find an investment that will provide that, stick with it. American funds has a number of funds that have ten year averages over 12%, Washington Mutual does also. If you’re going for mutual funds check ten year returns, not just the one and three year returns. That will prove whether or not a money manger knows how to continue to profit over the long term. Good Luck!
January 10, 2009, 10:01 pmstock.geek:
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January 11, 2009, 9:04 pmmuncie birder:
There is more risk to investing in individual stocks than there is to investing in mutual funds because mutual funds offer more diverse holdings, so if one holding goes sour it will impact the mutual fund only a minor amount. But if you buy one stock and it goes sour, it is not a very good experience.
Some good funds, or rather funds that have been good in the past are Pennsylvania fund, Bruce Fund, GAM–a closed end fund, SWZ–a closed end fund that invests in Swiss companies, and IIF–a closed end fund that invests in India. Of those mentioned Pennsylvania fund is relatively safe as is GAM and SWZ. IIF and Bruce Fund have had spectacular results. Whether that will continue remains to be seen.
If you have a hankering to invest in particular stocks, a few relatively safe ones that over the next 15 years should do ok are BAC, JNJ, PG, MMM, but there is considerably more risk in investing in just one or two particular stocks. Despite the fact that these 4 are top flight companies, at one time everyone thought Enron was top flight too.
January 15, 2009, 1:48 am