The gift of stock makes children feel like grown-ups, but more importantly, company shares are an investment in their future and an opportunity for an early lesson in saving and investing. If you’re considering buying a share or two for a child, grandchild, niece or nephew, the following stocks are a great place to start.
Some are individual companies, others are ETFs, which gives you a chance to explain the concept of diversification and the danger that comes with risking it all on one bet. Some are good because they deal with kid-friendly companies or themes. Others stand out because they deal in exciting, futuristic technologies that border on science fiction. Some just present an opportunity for a lesson in sound investing.
All of the following stocks, however, are potentially good investments. They’re all large, established companies and funds that have the potential to continue to perform well. That said, they’re just suggestions — not investment advice. Only qualified financial professionals can give you that. Take a closer look at some options if you’re looking to buy stocks for the child in your life.
The surest way to keep children interested is through something they already like — and what kid doesn’t like Disney? Even if your little ones aren’t fans of Mickey, Moana, Cinderella or Elsa, maybe they’re sports fans. In that case, Disney owns ESPN. More into superheroes? Disney owns Marvel. Star Wars? Yeah, that, too.
All those revenue streams make the company incredibly adaptable. The virus shuttered Disney’s bread-and-butter theme parks and cruises at the same time, but its stock still soared 140% from its pandemic lows, according to Investor’s Business Daily.
A single share represents two gifts in one — a reliable long-term investment and a little slice of the company that owns a bigger chunk of American pop culture than any other name on the market.
Vanguard Total World Stock ETF (VT)
Everyone wants to give their kid the whole world, and with the Vanguard Total World Stock ETF, you can — sort of. The most diversified ETF that money can buy, VT includes a sliver of literally every single investable stock in the world — nearly 9,000 securities in total — across all segments, sectors, categories and caps.
A share gives your favorite kid a lifelong investment in the entire global economy. Even better, VT provides the perfect teachable example about how individual securities in a fund become more diluted with each stock that you add.
Humankind US Stock ETF (HKND)
For many young people, stock market investing is synonymous with ruthless greed and the pursuit of profit at all costs. By turning your young one on to ESG (environmental, social, governance) investing, you’ll introduce the concept of capitalism with a conscience. When vetting prospective companies, ESG fund managers consider factors like the company’s environmental impact, political lobbying efforts, labor practices and fair trade commitments.
HKND tracks the Humankind U.S. Equity Index, which includes about 1,000 U.S. stocks as part of an ethical investing strategy. You’ll also be teaching a lesson in bargain hunting. HKND has a low expense ratio of just 0.11% compared to 0.47%, which is the average among all ESG ETFs, according to ETF.com.
Global X Thematic Growth ETF (GXTG)
Today’s children will be grown-up investors in a world where exciting technologies and incredible machines change society — but by then, the secret will be out and the masses will have already put their money down. Today, all that is still the tech of tomorrow, and you can get in on the ground floor with the Thematic Growth ETF.
Global X is known for unique funds that cover emerging tech in cutting-edge fields. GXTG is a collection of some of the best of those funds and one of the coolest stocks a kid can own. Its different segments include genomics, fintech, social media, robotics, lithium and renewable energy. A single share buys your young investor a stake in a future that has largely yet to unfold.
If one brand had to represent America’s consumer culture and economy to the rest of the world, it would probably be Coca-Cola. With so many generations of parents and grandparents choosing Coca-Cola as their go-to starter stock gift for young and budding investors, it almost has to be included on the list — but it’s hardly just symbolic.
Founded in 1892, Coca-Cola has been paying dividends for more than a century. With more than 50 years of consecutive dividend increases, it has a place among the most elite class of income stocks in the world — not the Dividend Aristocrats, but the Dividend Kings. It’s one of fewer than three dozen Kings on the entire stock market.
The gift of Coke is the gift of history and security. Generations of investors have banked on it as the closest thing to a sure bet that the stock market has to offer.
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