Popular this Christmas season with kids will be lego, Sky Viper high definition streaming drones, and whatever the latest fad toy might be. The Hatchimals Egg anyone?
I'm sure all of the above toys have redeeming features, and the kids certainly love them, but I do question whether the value of these toys have any enduring value.
It's also perfectly conceivable that (whatever it is your kids have asked for) a share portfolio wasn't on the Christmas wish-list that was emailed to Santa.
If you're a parent (or grandparent) reading this, this is where you step in.
Buying a small share portfolio to obtain a financial start for the kids in your life will be the gift that keeps on giving over many years.
You can also add in the educational benefits of watching and monitoring your kids' investments over time, hopefully teaching them many good financial concepts along the way.
So, if you're thinking of something a little different to metaphorically 'place' under the Christmas tree this year, here are three starter stocks that I think would suit a child's portfolio for many years:
REA Group Limited (ASX: REA)
After hitting a high of over $65 back in late July, the stock now trades at a more reasonable valuation and pays a fully franked dividend yield of 1.8%.
REA Group runs its flagship residential property portal www.realestate.com.au which is effectively the number one website in the country for both buyers and sellers of property. With the company's dominant market position in Australia combined with a number of overseas investments to provide additional growth in the years ahead, I believe buying shares in REA Group will prove to be a worthy edition to any starting investor's portfolio.
Flight Centre Travel Group Ltd (ASX: FLT)
At current prices of a little over $30, the stock is trading at just over 12 times last year's earnings and paying a fully-franked dividend yield of almost 5%.
Even if profits are expected to fall this financial year, the stock still looks reasonably priced given the falls in its price from a high of over $45 back in March this year. The portfolio of travel businesses contained within the group I fully expect to be decent earners over time and to contribute meaningfully to overall profits in the years ahead.
As Flight Centre has demonstrated recently, few businesses' earnings can continue growing year-in and year-out, but if you're able to take a 5+ year view, today's price for the stock looks reasonable value for a starter position.
Technology One Limited (ASX: TNE)
This company always looks expensive, but in saying that, this is a very high-quality business that has yet to let its shareholders down since it was floated back in late 1999.
Technology One is an enterprise software company which sells to a myriad number of companies, government agencies and statutory authorities providing software solutions which are increasingly cloud-based.
With steady compound annual growth rates in earnings-per-share of around 12% over the last 10 years, and with expected earnings growth of 15.4% this year and 18.3% the year after, this company's shares look to be a fairly safe bet over the long term.
Foolish takeaway
I'm certainly not saying to replace all gifts with a share portfolio!
But buying a small portfolio in addition to the traditional wrapped present under the tree should be warmly received. Yes, buying shares may look to be a pretty boring gift now, but longer term, the portfolio should be recognised as the gift that keeps on giving.
And if you're looking for more ideas in addition to the ones above, you can also consider the three in the report below.
