You can't time the market, as they say. But if you're looking for opportunities to teach your youngster about investing in stocks, the timing couldn't be better.

Look no further than the microscopic interest paid on savings accounts and certificates of deposit over the past couple of years. That's likely to elicit a big roll of the eyeballs from your fledgling young investor. On the other hand, the returns generated in stocks have not been shabby.

Whether your Warren Buffett wannabe is ready to lay down some hard-earned money on stock picks or just wants to learn to read the hieroglyphics in the stock tables, make sure you talk about the rewards of investing, as well as the risks and the challenges. Point out that even the most seasoned investors only talk about their winners, rarely their losers, and that money you plunk down should be money you can live without.

Consider the woman I spoke with last week who was searching for ways to introduce her 11-year-old grandson to the basics of investing. "I don't know where to begin," she said.

Here are five strategies. Go as fast and as in depth as your young investor desires:

Look at investment websites

There are plenty of books that can explain investing basics -- any library or bookstore has what you're looking for -- but the homework might be more engaging online. The New York Stock Exchange, for example, has educational material at www.nyse.com that is designed for middle school and high school students. The site includes a poster-size explainer of the stock tables. Two other sites to review: The Motley Fool, at www.fool.com, and the Morningstar tutorial center, created by the mutual fund research firm, at www.morningstar.com.

Join the club

One of the best ways for youngsters to cultivate an interest in investing is to join an investment club. Some schools establish clubs as an after-school extracurricular activity in which the focus is on learning with fake-money portfolios in virtual stock market games.

Another option: Create your own real-money club with a group of friends or family. The National Association of Investors Corp. at www.betterinvesting.org has set guidelines for getting clubs up and running. You can go that route or follow your own guidelines. Typically, clubs meet once a month, members research and recommend promising companies to invest in, and money is deposited regularly into a joint club trading account.

Start small

Nothing is stopping you and Junior from selecting a few stocks to buy shares in and then following them. Or you can purchase small amounts, including fractional shares, through ShareBuilder. Commissions are low, and you can select from more than 6,000 stocks. For account details, go to www.sharebuilder.com.

Invest with a pro

Some mutual funds with low minimum investments are geared to small investors. One such fund is the Monetta Young Investor Fund at www.younginvestorfund.com. Accounts for children can be opened with a $100 minimum deposit and a $25 monthly automatic investment, or with an initial $1,000 deposit. Young shareholders will receive a kit that include educational materials.

Dive into data

If your youngster is already knee deep in stocks, a copy of the 2011 Stock Trader's Almanac -- a calendar filled with historical trading data, notable moments in the markets and much more -- might be just the ticket. The 44th edition, compiled by the father-son team of Yale Hirsch and Jeffrey Hirsch, is available for $40 at www.stocktradersalmanac.com.

 

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Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back

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