The holiday season is rapidly approaching, and while kids everywhere are building long wish lists, parents would be wise to spend a least a little gift money this holiday season on stocks instead of toys.
Giving the gift of stock has multiple advantages that one should consider. The most obvious is that you are giving a gift that has not only monetary value today, but also the potential to grow over time. Instead of spending $200 on a Lego set that will only be destroyed in a month or two, why not gift $200 worth of stock that will hold its value (hopefully) for years to come.
In addition to the monetary value of the gift, you are also creating a valuable educational tool. Once your child owns some stock, even if just a very small amount, chances are good that they will get excited about investing and start to pay attention to their holdings.
You can use this as an opportunity to talk with your child about how the stock is doing, and hopefully educate them on what factors can move stocks in one direction or the other.
Investing is a long-term game. Some people are lucky to hit the jackpot and make a fortune in a very short time period, but for the vast majority of people, investing is a lifelong attempt to build a nice nest egg for retirement. The earlier you get started, the higher your chance of success. This is why I love the idea of gifting stocks to children as opposed to spending money on toys that will just get lost or broken within a few months’ time.
Let's take a look at five stocks that would make great gifts this holiday season.