Need some help....

I have a guy who has a 2 yr old. He wants to invest in something that she won’t see until she is 23. What is the best way to go about this???

How much money are we talking?

It’s pretty simple - there has never been a 20 year period in US history where any investment class outperformed stocks. Either it’s a new paradigm or she should be in stocks. For a kid like that, the asnwer is 529 all-equity plan in which he can invest as little as $250 or as much as $125,000/state = 50*125,000 = big bucks. She gets tax deferral, no kiddy-tax on Mom and Dad, and 20 years of equity appreciation. Not clever but it will work. Check out TIAA-CREF’s and Vanguard’s plans.

A high growth (passively) managed fund, with tilts to small and value stocks. Look into DFA.

So that stuff about deferred tax/kiddy-tax doesn’t matter? Work out what 20 years of deferred tax on 10% is worth. If you don’t need liquidity for 20 years you need to get the benefit of not needing liquidity for 20 years. There’s also big differences in things like the status of UGMA accounts and 529 accounts. The govt gave you this one, might as well take it.