What is in my kids' investment portfolio?

If if was 1990, I would have chosen Disney. Back then, they had the bonus of physical certificates with Disney illustrations on them. Digitalization aside, ideas for my daughters portfoliocome from the same discipline...I watch and listen to how she and her friends are interacting with the world. In recent past for instance, her portfolio has included shares of Netflix. Although we hold shares for the long term for her, we are always keeping an eye out for new ideas. Roblox has played nanny to my sanity this year so Im looking forward to their IPO in March. She is all about Pinterest for craft ideas and it was a great joy and education when I let her push the Purchase button on my YouInvest trade account.

Let me be crystal clear - this is not a stock recommendation newsletter. It is a think piece to get you to realize the advantage of the 18-20 year investment horizon you have from when a child is born until they may need some cash for school, to start a business or buy a place to live. That 20 year time horizon gives you room to take on more risk than say if you needed the money next year. If your kid was glued to Netflix around 2002 and you had bought $100 worth of stock, 19 years later those shares would be worth about $55,000.

If you do buy shares, have a discipline that makes sense for you and only invest what you can lose. You can keep it simple and buy shares in one of Warren Buffets favorite tools for individual investors, index funds - they usually charge only .5% and simply track the overriding market. The S&P historical annual gains are 10%. Pretty good return for doing nothing but hitting a few keystrokes on the computer. Past gains of course do not predict future returns.

My own discipline involves purchasing an initial $1000 worth of shares in something that has grabbed my daughters attention. This amount is enough to make us accountable but if we lose it, it won't effect the quality of our lives now or in the future. I then begin to look at 20 pre-determined metrics of a company that matter to me to decide if its a keeper. Investing in the community around my daughter and pop culture helps us look at the world from a different angle and a soft intro for her to savings and business. There are no guarantees but if I'm lucky, it will also give her some extra cash.


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