Down market is best time to teach children about investing

Down market is best time to teach children about investing

The market is down; stocks are lower than they have ever been before - that means it is the best time to teach children about investing. That is right; the best time to teach children about investing is now – with hands on trading!

The market is low and some stocks have been beaten down to almost incredibly cheap prices – that means you can open an account with little money and use this as an opportunity to teach the kids how to invest. Why… You ask?

Why teach children about investing now

Because it is cheap!
The reason why “Now” is the best time is because stocks are so low. You can open a free account online [ I did it with sharebuilder from NIG ], you deposit a $100 dollars that your not afraid the kids will lose and go at it. My daughter bought 300 shares of CITGQ for $65 dollars [ not my best choice but hey, she’s learning and she wanted a high risk with high return – probably thinks the govrn’t will bail them out ]

The next best reason is because they are young – they have time on their side. Even if you just teach them how to play it sensible, safe and just take advantage of good companies who are making money but their stock suffers only because of the current market claimant. Take for instance AIG, it dropped down to $6 dollars and then 1 year later it was up to $47 dollars. They [ children ] have time to ride out the nonsense.

Why you should consider “penny stocks”

teach children about investingAnother reason why this is the time to teach your children about investing in stocks is because they can generate greater returns with “penny stocks”. Penny stocks basically means stocks that are trading below the five dollar mark. Some may be $4, $2 or even .56 cents – but they are all classified as penny stocks.

You can leverage more with your money, low stock price and your child’s luxury of time with penny stocks.

Here is the reason why I let my daughter make her crazy stock pick of CITGQ:

If she bought 3 shares of stock that totaled $100 – the odds of her making money is small. Even if each stock rose a $100 dollars at most she makes $300 dollars profit.

But if her 300 shares that she bought at 0.23 cents each rose by:

Each share up $1 x 300 = $300
Each share up $2 x 300 = $600
Each share up $3 x 300 = $900

Do you get the picture? The stock 52 week high was $6 and 52 week low was 0.17 cents. If her risk pays off and the stock only goes back up to $6 she can sell and make $1,800. Now that’s a big risk [ bet ] but a really hefty return; plus she has the youth [ time ] to wait for it to bounce back [ that is if it doesn’t crash and burn ].

The ultimate reason to teach children how to invest now

The ultimate reason to teach your child to invest now, with hands on teaching is – because it’s the best way to teach. Reading and talking about investing can only take you so far. When your child has real money, real world experience and an opportunity to get a real return on that investment - they are motivated, more interested in learning.

My daughter plays online games about business but in her mind she knows that it is not real, she takes big risk becuase it is a game. But with real stocks, market conditions and real money at stake – she has to put her emotions in check and has to actually think about what she is doing and why.

kids money investing

1 comment :

Penny Stocks said...

Well written article, and I agree entirely. Thank you for your fresh point of view. Keep up the good work.

penny stocks

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