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Opening Segment #3: |
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'A
Family
Affair -
Investing
For Kids' |
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Friday,
June 19, 2009 |
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Jim's
rating on
this stock |
STOCK
SYMBOL |
Closing
price that
day |
Full Company Name |
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MCD* |
58.17 |
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DIS |
23.53 |
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HAS |
25.14 |
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VFC* |
59.25 |
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GPS |
15.80 |
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AAPL |
139.48 |
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Jim:
Most parents,
when they want to
teach their children
the value of saving
money, will take
them to the bank...
get them a
passbook... or maybe
buy them savings
bonds. Let me tell
you something... if
you really want to
teach your children
how to be smart with
their money, I say
forget the savings
account, and open up
a brokerage
account... because
the best way to make
sure your kids know
how to manage their
money, is to get
them interested in
it... in
investing... and,
for better or worse,
it doesn't get any
more interesting
than stocks and
something you can
talk about with
them...
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See comments continued below...
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Jim's Charitable
Trust Alert -
Just happened:
* Just
BOUGHT new stock: Inverness
Medical
- IMA!
& just sold both BHP & 3M *
see
all
Jim's
latest
holdings here> |
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Friday,
June 19, 2009
(Cont'd from
above)...
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Jim:
I wish I could buy
individual stocks
for my kids but,
luckily, you're not
weighed down by the
same kind of
restrictions I
have... And I know
exactly the
portfolio I would
put together... five
stocks that would
make investing
fun... even for a
toddler...
And tonight, on this
special "Father's
Day: It's a Family
Affair" edition of
Mad Money, I'm going
to share it with
you...
We're playing "Am I
Diversified?" for
Declan... That's our
Executive Producer's
son (showing his
baby picture). She
just had him on
Monday... Yeah, we
miss her... we miss
her. Actually,
Declan can't own the
stocks either...
same rules that I
have. It doesn't
matter. He can have
a rotisserie league
and play with fake
money...
So what stocks
should you buy for
your kids to get
them interested in
the market?...
You want to buy
companies they
actually like, and
are familiar with...
ones that they can
get excited about.
McDonald's
(MCD*)
First, I think
you've got to start
with Mickey-D's...
you've got to start
withMcDonald's
(MCD*).
I don't know a
parent who hasn't
taken a kid to
McDonald's, if only
for the clean
bathrooms. It's
where children want
to go eat. It gives
away the great toys
that they love so
much, and it's
exactly the kind of
company that can get
kids interested in
the market, and you
talking with them
about money.
I'm not saying you
have to take your
kids to eat there,
although believe it
or not, it now has
tons of healthy - or
at least healthier
offerings - to go
along of course with
the massively-good
fries. But it's
something to buy
even just, again, a
single share of.
Plus McDonald's is a
well-run company
with a lot of
international
exposure. It makes a
terrific weak dollar
play, and we think
the dollar's going
to get weaker on Mad
Money... That 3.4%
yield... a terrific
way to teach your
kids about the value
of compounding
reinvested
dividends. That's
that "rule of 72"
I've been talking
about, where you
divide the number 72
by the yield, and it
tells you how long
it will take to
double your money,
if the stock just
goes nowhere (and
the stock price
remains flat). In
the case of
McDonald's, from the
yield alone, it will
take 21 years to
double your
investment. Who
knows? If you start
early, it could pay
for a week's worth
of college tuition.
Because I know as a
father, who pays
that bill, it's gone
up at least tenfold.
I'd buy at least one
share as soon as
your kid is born, or
even before then, as
I've always thought
it'd be a great idea
to register baby
showers with Schwab
or TD Ameritrade...
Macy's has nothing
on them.
Walt Disney Co. (DIS)
Next, I'd pick DIS,
a company that every
child would
recognize, with the
theme parks, the
animated films, the
Jonas Brothers...
especially with
Pixar. There's
simply no
publicly-traded
company that will
get a kid more
involved in
investing than a
Hannah Montana/Miley
Cyrus Disney. It's
got a terrific CEO
in Bob Iger, and is
simply a world-class
franchise that I
think your kids
could own for years.
It held up really
well during the big
selloff.
Hasbro Inc. (HAS)
Then I think you
want a toy company
to get your kids
owning something
that they're also
playing with on a
regular basis. You
can't beat Mr.
Potatohead, Tonka
Trucks, My Little
Pony... not to
mention any of the
Milton Bradley or
Parker Brothers'
games. Board games,
by the way, are a
great way to connect
with your kids...
What better way to
teach them about
money than with the
company that makes
Monopoly?... HAS let
your kids truly own
a piece of Boardwalk
and Park Place...
and has the added
advantage of being a
consistent grower
with a cheap stock.
VF Corp. (VFC*)
You're going to want
some retail too...
something that your
kids will be
familiar with. Now
Gap Inc. (GPS)
works as a company
that we'll recognize
as kind of a
turnaround
situation. Not my
favorite, but who
doesn't take their
children to Gap
Kids?... You want a
better stock though?
One that I think
will have a much
better chance of
going dramatically
higher?... It's a
brand that I think
your kids will be
even familiar with.
I would swap out of
GPS and swap into
something called
VFC. They're the
maker of
kid-friendly, North
Face clothes...
which I think by
far... by far...
will have it all
over the Gap. Now,
just so you know,
understand... I own
VF Corp for
ActionAlertsPlus.com, my
charitable trust.
I think they're
having a much better
quarter than most
people realize.
Apple (AAPL)
Finally, to round
out our gambit of
"Am I Diversified"
for the youngest
demographic, I want
to throw in a share
of AAPL. You might
think this
technology company,
at $138, $139, is
something that
younger kids
wouldn't be aware of
but, believe me,
you'd be surprised
at just how much
awareness of Apple's
brand there is among
even really young
children. They'll be
hitting you up for
their first iPod
before you know it.
You can also think
of Apple as a stock
your kids can grow
into, not to mention
the fact that
there's nothing more
engaging than a
stock that actually
goes higher. And
Apple's at the
forefront of a
product cycle that
should produce
multiple year gains.
iPhones,
iTunes, iChat,
iPod... How about
iBuy?...
The bottom line...
▼ ▼
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The Bottom Line!:
The best way to
teach your kids
about money is to
either open a
brokerage account,
or start a
rotisserie stock
league with fake
money, and buy them
one share of
McDonald's
(MCD*),
Walt Disney Co. (DIS),
Hasbro Inc. (HAS)...
VF Corp. (VFC*)
or
Gap Inc. (GPS),
but not both... and
Apple (AAPL)...
a diversified
portfolio that can
really get them
engaged with the
process of
investing. I'm
speaking from
experience...
[verbatim recap]
[end of segment]
Read Jim's next Segment
here
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Read Jim's next Segment
here
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