The stock market has witnessed a stunning recovery since the depths of the pandemic last year.
For instance, the technology-driven NASDAQ has surged by almost 130% since hitting its crisis low last March.
And our local index, the Straits Times Index (SGX: ^STI), is also up 7% year to date as the recovery takes hold.
And while this type of performance may not be achievable every year, the stock market’s potential to deliver better returns than other mainstream assets appears to be high.
As such, the stock market could be the perfect vehicle to invest in, on behalf of your children.
In time, doing so could provide them with the foundation for a prosperous financial future.
Long-term potential
Since the time horizon when investing for a child is extremely long, it may be possible to generate higher returns by taking on slightly more risk than usual.
Clearly, taking high risks without a commensurate increase in potential rewards is not a logical idea....