Stocks for a 15-20 Year Hold Time

[petec]

LatAm is so tricky - the Findlay Park fund was the one I was most impressed with (now at Brown Harriman).

 

That's the one. Latam is tricky but as a result you can get some good businesses at reasonable prices. And directionally, it's getting less tricky. The major economies have addressed many of their structural issues (inflation, fiscal, trade imbalances, over-regulation, weak institutions). It's the best performing major region in the world over the last 30 years (based on equity indices) despite being down 40% from its high, and I think it has a decent shot at compounding over the next 20. The currencies are cheap too.

 

 

[rkbabang]

I would recommend against this path where each kid ends up with very concentrated positions in different stocks. there are situations where this ends poorly.

 

I know of a situation where grandparents had given two siblings some stocks for education. one siblings account had a big position in GE; another had a big position in XOM. the financial crisis was far more devastating to GE. unintended inequity was the result.

 

I'd recommend ETF's/indices or berkshire (less likely to have a high variance outcome, but still a single stock) for this purpose.

 

I did this with my kids when they were young.  I opened UTMA accounts for each of them to invest birthday/christmas money, a portion of their allowance every week, etc...  How I handled it is that I had the same stocks in each of their accounts.  They still ended up unequal due to the fact that they had differing amounts of the stocks because they didn't always have money at the same times to invest and one of my kids invested more than the other (we let them decide to spend some of their money if they wanted).  But the inequality was less than 10% total account value by the time they were adults.  I'd recommend not having different stocks in each account, that would almost guarantee that the performance will not be close to each other.

 

For stocks, I'd recommend nothing too risky, maybe BAM (or partners as you already have), AMZN (even at today's prices this will over perform in 15 year timeframe), S&P500 index, BRKB.

 

 

 

[Uccmal]

Along the lines of Cigarbutt’s ideas.  I opened the RESP roughly 15 years ago.  We have money gifted from both sets of Grandparents, and I added in some for a few years.  Both kids are in the one plan.  My son will be accessing the account, likely in 2.5 years. 

 

I hold all common stock.  Varying size positions (all CDN) in RY, BMO, FN, Bam, Baby Bams, SLf, enb, Aqn, ema, Npl, Bce, WCP, and obe, and a couple of others.  I have seldom traded in this account and every stock but one pays a dividend.  I have removed companies that stopped growing their dividends and left the rest.  Lots of Utilities, Pipe, financials, and the one conglomerate. 

 

With my son likely needing this money in 2.5 years I have stopped investing and should have the first year in cash when the time comes. Then I can Time stock sales around market highs.  By my estimates we will have some 150-200 k left after sending both kids to undergrad.  We can use this a we see fit, or use to help the kids in 13 years when my daughter is done her undergrad, or pay for further education, etc. 

 

For this account I was less about market timing, and more about diversification, and buying as soon as the cash entered the account.  There are lots of decent homegrown companies that have done well over the long term regardless of the price I paid.  There has never been a need to diversify out of Canada.  At any rate most of the companies have international exposure in the stock price. 

 

And if I croak in the meantime the kids and my wife will have access to my portfolio which will pretty much set them up for life barring a nasty drug or alcohol habit. 

 

 

[Liberty]

Along the lines of Cigarbutt’s ideas.  I opened the RESP roughly 15 years ago.  We have money gifted from both sets of Grandparents, and I added in some for a few years.  Both kids are in the one plan.  My son will be accessing the account, likely in 2.5 years. 

 

I hold all common stock.  Varying size positions (all CDN) in RY, BMO, FN, Bam, Baby Bams, SLf, enb, Aqn, ema, Npl, Bce, WCP, and obe, and a couple of others.  I have seldom traded in this account and every stock but one pays a dividend.  I have removed companies that stopped growing their dividends and left the rest.  Lots of Utilities, Pipe, financials, and the one conglomerate. 

 

With my son likely needing this money in 2.5 years I have stopped investing and should have the first year in cash when the time comes. Then I can Time stock sales around market highs.  By my estimates we will have some 150-200 k left after sending both kids to undergrad.  We can use this a we see fit, or use to help the kids in 13 years when my daughter is done her undergrad, or pay for further education, etc. 

 

For this account I was less about market timing, and more about diversification, and buying as soon as the cash entered the account.  There are lots of decent homegrown companies that have done well over the long term regardless of the price I paid.  There has never been a need to diversify out of Canada.  At any rate most of the companies have international exposure in the stock price. 

 

And if I croak in the meantime the kids and my wife will have access to my portfolio which will pretty much set them up for life barring a nasty drug or alcohol habit.

 

Well done!