Hi, all--My 16-year-old completed her first calendar year with a REAL job (yeah, Hardees!). As a gift, I will be setting a custodial IRA up for her with her earned income, with about $2,000.My question: What would you do with the money, given the 50-year time horizon?Thoughts that crossed my mind:1) CD's until the pile becomes bigger. Not attractive at 5.75%.2) Zero coupon bonds. Would be much more attractive if interest rates were higher.3) DRIP a stock. Really hard to pick a single stock with a 50 year horizon. To get diversity, would probably have to DRIP another next year, etc.--now the number of accounts becomes a problem over time. Any ideas on a long-term pick? [Yes, I'm keeping up with the DRIP portfolio discussions. What would YOU pick?]4) Mutual fund family. Probably start with an index fund until the pile is, say, $10,000.5) Discount brokerage account. Then, each year's contribution can be invested as one sees fit. The tricky part here is to find a deep-discount brokerage that I'm comfortable with AND has ultra-low or no ongoing fees AND will accept a custodial IRA AND will reinvest dividends AND will allow bond investments AND has decent no-fee mutal funds to pick from. This choice allows Foolis Four-type portfolios to be set up, once the pile grows to $4,000 or so. [I can't see buying 4 stocks with $2,000, even at $12 commissions--that's over 2% off the top.]Any feedback? Thanks.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra