Investing in Grandchildren

Cindie and I have many different investments. However, the most important ones are not stocks, ETFs, or other temporary assets like our home. While I like my marble collection and enjoy good food, there is far more value in the lives of our children and grandchildren. One of the ways Cindie and I invest in our grandchildren is by spending time with them and teaching them new things.

Why These Five?

The key elements I wanted to have when I bought the investments for our grandchildren were growth of the investments, dividend growth, diversification, focus on specific sectors, and low costs. Dividend yield is not a primary driver of investment choices for the long-term investor. Without much commentary, I will show how this approach has worked in favor of our grandchildren with images from one of the six accounts. The top five investments are focused on ETFs, with one exception. The five are DGRO, VYM, FHLC, FTEC, and MAIN. MAIN is a business development company that pays a monthly dividend. GAIN, another one of their investments, is also a BDC and pays a monthly dividend.

Technology Investments

One thing the images do not show is the past mix of investments. In 2015 a large portion of the total invested dollars was in ETF FTEC. Because technology did so well, I decided to sell some of those holdings in order to add to DGRO. Sometimes it is time to sell a winner, or at least lighten up a bit on it.

Business Development Companies

BDCs have opportunities for unique investing returns. It is like buying many smaller companies that are under the BDC’s umbrella with less overall risk and greater overall opportunities for growth in the value of the investment. Therefore, investments like GAIN, MAIN, and NEWT are attractive for both excellent income and growth.

Let the Results Speak for Themselves

Investment income matters. When you are young you should reinvest proactively.
When you buy, think “diversification.” ETFs can help you do that to lower your long-term risk.
Have your investments doubled in value since 2015? If not, why not?
You don’t have to beat the S&P 500 to be successful. However, it is worth comparing your results against bond returns.

Analysis and Allocation Views

Bonds are not a good long-term investment strategy. Stocks are far better
A wise investor includes companies of various characteristics.
Know the sector weightings of your investments. Does you allocation fit a good view of the future?