Get children interested in stocks now, don’t wait until 2023.
by Hamadi Jett. July 16th
Have you heard the news? Stocks are back and pumping ever since the Fed decided to lower overnight borrowing rates close to zero. For businesses of all sizes, this simply means business loans are made cheaper.
In turn, corporate players borrow more in hopes of expansion. If, say, other like-minded individuals similarly view this company as a future market leader, the overall desirability of the company’s stock would increase. Thus, corporations can currently borrow at an unprecedented discount rate which implies high future rewards for those who invest now.
At the last Federal Open Market Committee meeting, officials decided interest rate hikes could come as soon as 2023, a year earlier than their previous 2024 prediction. Also, the committee was only two votes short of putting interest rates into high gear this coming 2022.
I hope you’re noticing a pattern here that the end date just keeps getting closer and closer, so what must we do? Well, we mustn’t wait!
…and here’s why
After analyzing the period between 1854 and 2009, the National Bureau of Research discovered, an average recession lasts for 1.5 years, and a recession occurs every 3.2 years. It is a well-known fact that many investors accumulate their wealth during times of economic contraction, given such times are best for low buy-in and low borrowing rates.
Judging by the indecisiveness of the Fed, a recessionary end is fastly approaching, and another prime investment opportunity may not come until an additional 3.2 years.
“But stocks are kinda boring; how do I make my child care?”
We get it. Stocks have a hard time at captivating adults, it’s unreasonable to think children will seek fun in numbers, spreadsheets, and colorful lines. If coupled with an interest-linked gift, however,
investing can be as – fascinating as receiving their favorite toy for Christmas or their birthday, except with better outcomes next year and the year after.
At Stuff&Stock we make the connection between interest and investment. Learn more about us here