About Investments for Children

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Investments for children should assume a fair amount of risk because of the long amount of time available to recoup any losses. Avoid bonds or fixed income investments for children unless there is no tolerance for risk with advice from an investments manager in this free video on investing.

Part of the Video Series: Stocks, Bonds & Investments
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Video Transcript

Okay. About investments for children. Investing for children, again, is much the same way you might invest for yourself. With, you know, stock or mutual funds that are put aside for a child, you have inherently, you know, the longest time horizon you could wish for. So that does give you the opportunity to pick some things that are safe that will take a long time to grow. You can take a little bit more risk because there is a longer time to recoup any losses that you might have over a given period of time. So investing for children -- things like bonds, fixed income products, so forth, not usually advised unless you really have no tolerance for risk. For a long time horizon like that, really, a great thing to invest with is to look at stuff that will grow -- maybe growth in income or just serious growth equity -- that will grow significantly over a period of time. Best way to look at that is look at the prospectus, look at past performance, get a rough idea of whatever you're purchasing, what it's done before and give you some indications of what it will do ahead.

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