5 Top Stocks to Buy for Your Kids (or Grandkids)

Do you want to give your children or grandchildren a gift that will teach them a lesson that will last a lifetime? Open a brokerage account for them, and buy them shares in a company. There's no better way to teach children about the power of compounded interest than to show them the value of that gift 20 years later. Do you want to make sure that you buy the type of stock that won't leave a sour taste about investing in the kid's mouth a couple of decades from now? We asked five of our contributors to name a stock that each would buy for a child or grandchild.

Owning shares of a company that they are able to connect with is probably more likely to accomplish both, but it can be harder to find a long-term winner if you get too caught up in buying them a "cool" stock. VF Corp (NYSE:VFC) can do both. I'm sure that picking a company like Waste Management (NYSE:WM) to pass on to the next generation is like being that crotchety grandpa who gives bad presents at Christmas. However, Waste Management is exactly the kind of stock that they will thank you for later in life. American Water Works Company (NYSE:AWK), the largest investor-owned water and wastewater utility in the United States, is a great choice if your goal in buying stock for a child is generating superior long-term gains. Tesla (NASDAQ:TSLA) is the perfect stock for someone who has an investment time horizon that stretches out for decades. Netflix (NASDAQ:NFLX) recently completed a major international expansion that nearly doubles its potential market to more than 540 households worldwide.

Source: Motley Fool

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