Six Five cannot help you with advice on educational IRAs barely understand Canadian taxes, shelters.
anyways on some advice on investing this money for your children.
1. fixed income should be included in the portfolio. your wife has a point in not wanting it all in equities. perphaps a bond, or CD/GIC that pays a good rate is not a terrible plan. would look at 1-5 yrs. however you could go longer choice is yours.
you could also buy an etf that track bonds, they pay divs, and the fees charged are small.
or just buy a cd or bond.
many people believe a child should have it all in equities but this is wrong.
sometimes fixed income has outperformed the equity market. and sometimes so does cash.
a percentage in fixed income is not a bad idea as most investors should have a certain amount in fixed income.
2. keep it simple. I know you said you have someone running your portfolio and that is fine.
however you should quickly be able to know most of the holdings in your childrens portfolio.
A week ago a lady called me wanting some general financial advice (a friend of a friend), anyways talked for 5 min. and found out she had .....
74, yes 74, yes 74 mutual funds. that is insane. I told her to cut the number to under 10, and probably 5 and then call me.
I meet 2-3 people every year who have over 25 mutual funds.... there is no way you can track that number.
3. a DRIP/SPP is not a bad idea.
in the US there is sharebuilder, and buyandhold and probably others.
you can buy a few shares and the dividends are reinvested.
I belong to a shareclub and have a DRIP/SPP stock portfolio for over 10 yrs.
you would buy a collection of stocks just a few, and build them up over time.... will post about my DRIP/SPP portfolio has done quite well, there is advantages and disadvantages.
in Canada, believe there is a service called shareowner...note: do not belong to any of them, but they seem good....
4. have a general idea of what benchmarks you want to beat. though the focus is long term, that does not mean you want a portfolio with terrible results, you must set benchmarks, for returns, and also compare them to certain indexes.
5. finally do not fall in the trap of investing in blue chip companies...that show low returns. some large US companies will find it hard to grow just becuase of their size.
good luck six five, will post my drip/spp portfolio and info, there is some stocks in there that could be good long term holds and they all pay dividends....another good sign.
thanks
selkirk
