But we can also refer to a different market, like all transportation stocks or technology companies. Set up a portfolio on your PC Make your child an investor, not an observer. Create your own spreadsheet or use personal finance software. Involve the child in everything that has to do with the portfolio that you two have started. Choose the stocks together, track their performance and develop a plan for when you should sell or add to your investment.
Brokers love that.
If you trade electronically, have the child near you when you make a trade. Do call the stocks they own, fantasy or fact, a portfolio. That way your child becomes acquainted with the jargon. You can give your child some of the money to spend, while encouraging him or her to reinvest the rest. The key is to demonstrate that the money in the account represents real cash.