> and let him pick a couple stocks to put some money into
And yet we complain that corps today are too focused on their market valuation over everything else; customer experience, longevity, worker conditions, R&D are all being neglected in order to make the needle go up.
'Investing' in stocks in order to flip them when the price goes up is feeding this insanity. Teaching kids that this is perfectly rational seems selfish and short-sighted.
Our children should be encouraged to invest into something like bonds which actually help promote economic growth.
Teaching children to invest in bonds is spectacularly bad asset allocation. Investing in stocks or bonds both help promote economic growth.
For me, the notion of teaching kids to invest in some company they know (Disney, McDonalds, Coke, Apple, or whatever) and telling them that they are buying a tiny, tiny share of the company is an important mental model to help shape in them.
Stock picking and speculation especially with a single company is indeed a spectacularly bad strategy, but it can be a motivating start.
A well diversified fund would be the better alternative if you need to aim at a single thing. But it's hard to say what's the better first step if you're trying to teach personal finance management.
Investing in stocks and bonds both helps promote economic growth.
Corps have always been focused on their market valuation. It's up to society, and the laws it passes, to change their incentives.
Bonds returns don't match inflation so long term you're loosing money to inflation, it might be better to spend it