Expert: Paul Henneman - 5/7/2006

Question
I want to invest $100 for a 6 month old child of a friend to have at age 21. I thought of a savings bond, but can I do better? I wish I could afford more.
Where would you invest $100 for 20 years?
Thanks

Answer
Roger,
   Thank you for your email! Yes, I think a savings bond for this type of investment for a friend's child is perhaps the best thing. The problem with a higher yield investment such as stock would be the transaction cost to buy the stock, and many organizations require a minimum investment. However, you could try to contact the investor relations department at a major publicly traded company to see if they could offer $100 in company stock. The final worth of the original investment if placed in a major publicly traded company would be worth a huge amount more than a savings bond. However you would need to choose a large company that would certainly still exist in 20 years. Perhaps Coca Cola, McDonalds, Home Depot, Microsoft, IBM, Intel, Dell, or other Fortune 500 type company would be worth looking into. Almost any major publicly traded company will have an 'investors relations' link on their website with email and phone number information to ask this question.
I hope this helps! Please do not hesitate to follow up with me if I can be of any further service,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com
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