Got $3,000 for my kid to invest

Discussion in 'Business, Investing & Finance' started by Bushmaster, May 20, 2020.

  1. Bushmaster

    Bushmaster Well-Known Member
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    Thinking about BB&T stock. Prefer a blue chipper that is historically undervalued due to no other reason but corona.

    Opinions?
     
  2. Mr. SEC

    Mr. SEC A Very Impatient Grown Up
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    I have a watchlist of about a dozen stocks. I specialize in pharma and medical devices, that in is my wheelhouse and where I direct my focus. My two current favorites, VRTX and ABMD. I got a lot of my own money there, I expect these to easily triple in the next 5 years. I allocate 10% of my portfolio to individual stocks. Do you know how to read a financial statement? If not, I would not buy individual stocks.
     
    • BMF

      BMF Bad Mother....
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      S&P 500 Index Fund.

      When my grandson was born, August of 2018, I put $3K into an S&P 500 fund and have been adding to it every month and every birthday/Christmas. It's done well, even after the crash of 2020.
       
      • Bushmaster

        Bushmaster Well-Known Member
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        I can read financials better than most. I am a CPA in public accounting and spent 70% of my time doing audit work. None of that means I can pick stocks.

        I am looking g for so.e sticks that are seriously undervalued. Doesnt have to be bank or energy.
         
      • FireFoley

        FireFoley Senior Member
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        Well first off I had to pick myself off the floor after seeing that @Bushmaster started this thread. You are one of the smarter financial guys on here and you are asking us amateur hackers for advice, LOL. Meanwhile I am presuming your kid is young and has time on his side, so why not be a little more aggressive than a so so large regional bank. Or if in that sector why not a USB or RF or a KEY that might also have takeout chances? Like the medical device idea especially since those stocks gotten beaten down when all elective surgeries were cancelled. Have not looked lately but BSX, Zimmer, Stryker, Medtronic, etc. Or back to finance, maybe a play on the cashless society thing. Not for me b/c I don;t trust thin air, but these youngsters do not know what cold hard cash looks or feels like.
         
      • FireFoley

        FireFoley Senior Member
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        I knew we had something in common. I was a CPA in pubic acct. and spent about 5 minutes doing audit work before turning in my card and going into commodity futures. You probably made a better choice, given those $70 lunches you partake in :fistbump:
         
        • Bushmaster

          Bushmaster Well-Known Member
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          Well Foley, I do think I am a financial wizard of such, but I know Jack about picking stocks. I leave that to stock pickers.

          If you need advice on taxes, running a business, business flow, low income rentals, commercial rentals, etc, I am your man. I put my money in American Funds and let the pros do their thing. I want that 8% return compounding until I retire.

          This 3k belongs to my kid and I want to get him involved in the market and how it works. So that is why I was thinking a particular stock.

          Bb&T is about 60% of where it was pre corona and I think pays a 4 or 6% dividend.

          Not convinced on one stock. May just stick in a mutual fund d and be done with it.
           
        • Bushmaster

          Bushmaster Well-Known Member
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          The local Edward Jones rep wants me to take over her book but I dont think I could do both. If i were ten years younger i would

          You made the right choice
           
        • FireFoley

          FireFoley Senior Member
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          You know @Bushmaster I am not poo pooing 3 grand, it is real money, but not enough to move a lot in a fund. Also he can only follow that daily as it has one NAV at the end of each day. If you put it in say BBT, for instance, he can punch up the ticker at any time, see it actively trading, etc. It won't triple in a week, but I doubt it goes broke either. Now if you want to put your CPA cap on and slave over its loan portfolio and see what lies under the rocks (high risk energy loans maybe), I am not against your thinking. He can learn about ex dividend dates and how stock prices are adjusted downward for the amount of the dividend on the ex date. Can learn about the record and pay dates, etc. And you can even get him an old fashioned stock certificate if you like. Just hope it does not turn into wall or toilet paper like the original GM and others. But the stocks you are talking about should stay solvent.

          BTW I know you know this but BBT is now Truist after its merger with Suntrust. Symbol is Tsomething
           
        • Detroitgator

          Detroitgator Well-Known Member
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          How old is your kid? And are you trying to get him interested to learn and care, or just to tell him what you think is best? I'm serious, not taking a jab.
           
          #10 Detroitgator, May 21, 2020
          Last edited: May 21, 2020
          • Taco Gratis

            Taco Gratis Clear eyes. Full hearts.

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            If you're picking stocks, my penny's worth is to have good risk management in place.
             
          • no1g8r

            no1g8r Bringing Reason to the Masses
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            This is a great question. If your kid is a teen that you want to get interested in the markets, you'd want to pick stocks of companies that your kid knows and likes, even if you give up a little in overall returns. Or maybe an ETF that is in a sector that interests him.
             
            • Mr. SEC

              Mr. SEC A Very Impatient Grown Up
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              That's awesome. My dad did that for me when I was a kid. It is more about the experience and education, than it is the money. If you are looking for a blue chip that is effected by COVID-19, that you expect to recover, your kid might enjoy following DIS. Just a thought.

              I retired in Jan, after I hit "my number". I actually feel very fortunate.
               
              • bradgator2

                bradgator2 Rioting
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                I have make my kids sit aside 20% of any birthday/Christmas/etc money they get. My 11 year old has $1800 in her TDAmeritrade account. I let them research and pic their own stocks.

                When I opened the account for her, I did buy 3 shares of VTI, which is total market index on a razor edge 0.05% fee (up 30% since she has owned it). But she picked and has destroyed AAPL, AMD, MSFT (her very first stock... up 160%), PG. DIS. She picked KO and NKE in January. She'll do ok on those in the long run. She wanted in on the UBER and PINS IPO. UBER has been fine... PINS not so much.
                 
                • Mr. SEC

                  Mr. SEC A Very Impatient Grown Up
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                  You daughter is buying IPOs!!!! I love it.
                   
                • bradgator2

                  bradgator2 Rioting
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                  But to answer the question at hand... let them look at Visa, USB, Honeywell, BA, RTX, GD, DIS. You can still get those at a nice discount (maybe not V... but AXP, USB, PNC)... and should crush it moving forward. Have them decide.
                   
                  • Bushmaster

                    Bushmaster Well-Known Member
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                    21. Trying to get him interested and seeing how money works.

                    I have a variety of options I could do. Thought about a down payment on a rental property for him. I am hitting between 15-20% return on those every year. But as Foley mentioned, you can't pull that one up on an app and see your rate of return.

                    My college roomie is a state head for BB&T and he was whining because their stock hit the fan after corona hit so I thought it would be a good buy.
                     
                  • bradgator2

                    bradgator2 Rioting
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                    21. Oh interesting. Yeah... I like DG's thought process regarding how to do it now if you are just starting out in the real world. Help on getting a rental property started sounds like a fantastic idea.
                     
                  • bradgator2

                    bradgator2 Rioting
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                    Alright.... USB has been coming up for awhile. I nibbled at it this morning.
                     
                  • 78

                    78 Dazed and Confused
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                    Too many unanswered questions to be summarily handing out advice.

                    How old is the kid?
                    How long is the goal?
                    Will you be adding to the investment?
                    Do you intend to trade?

                    Some of more attractive companies are trading at prices that make divvying up $3,000 a bit unwieldy. If you intend to trade, why would you not consider investing through a UTMA to remove the capital gains exposure from your tax return?

                    Personally? I like NVDA, BABA, V, FIS, MELI, AMZN, UBER, SHOP, ETSY and FISV on the individual side. MRNA was a fabulous buy at 35.00. It’s probably still good at 69.00. Pfizer’s in that mix.

                    We’re concurrently in a bull and bear market with the S&P pushing resistance on its 200-day moving average. We’re likely going to see a struggle ensue absent a Covid breakthrough. Too many bad picks in the S&P itself. It’s like fishing with a big net — too big for this market. You need to be able to isolate companies that are positioned to benefit from Covid not just now but for the foreseeable future, and avoid those that have already benefitted as much as they’re going to.

                    FWIW, the top of the top hedges are buying COUP, UBER, APPL, MSCI, AYX. They’re adding to MSFT and BABA.

                    With the amount of money you want to invest, it may make sense to consider an ETF or two, preferably sector funds. There are some good ones out there. After all, how many shares of AMZN, SHOP or GOOGL can you pick up with 3k? Not many. I’d address the above questions before moving forward. You’re a CPA so the tax issue should be simple.
                     

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