As we wait for stocks and exchange traded funds (ETFs) to rebound, it’s a great time to help yourself and those that you care about. I have no clue about the short-term direction of the stock market, but I’d bet my new Taylor Made driver that it will be higher five years from now. With that in mind, here are a few things you can do to take advantage of the lower stock prices:
1. Teach Your Kids or Grandkids About Investing
This week I opened up brokerage accounts for my three kids (13, 10 and 7) and got their feet wet.
A few years ago, I took them to Washington Mutual and helped them set up savings accounts in their names. It’s been fun going to the bank with them and watching them make deposits when they get birthday money or save up from their allowances.
At home, they see me on the computer, looking at stocks and charts. The joking at dinner time is centered around ETFs, as my kids groan “Dad…everything is ETFs.” With this being a great long-term buying opportunity, we closed the savings accounts and opened brokerage accounts at Charles Schwab.
I asked them each to think about companies that they like. One of them loves Apple (AAPL); another bought some Dell (DELL) and Microsoft (MSFT). Another figured that with the high gas prices, perhaps Chevron (CVX) would be a good bet. My daughter likes Roxy clothing so she bought some Quicksilver (ZQK).
Yesterday, my 13-year-old was thrilled at the money he made. We’re not talking about big bucks here. That’s why if you’re thinking about getting a child educated about the stock market and investing, what better time than now? Stocks have been punished, making this a low-cost lesson. On the other hand, too, there’s the possibility that they’ll go back up and you’ll be off the hook for paying them an allowance.
Right…
I couldn’t help but convince my daughter that she needed an ETF, so she bought iShares MSCI Emerging Markets Index (EEM). This way I can tease her at the dinner table. I’ll report back later on the benefits and fallout of this enterprise.