8. The Fallout

When my son turned 11, I opened a Schwab brokerage account for him. This was in the midst of the technology bust; stock prices had fallen far below their bubble peaks, so it seemed like a good time to buy. More important, it seemed a good way for him to learn about investing, the economy, and the world around him. We didn’t catch the market’s bottom—9/11 hit a few months later—but we did pretty well over the next several years. I taught him about the merits of long-term investing and diversification; staples in our portfolio included blue-chip companies such as JPMorgan Chase, IBM, ExxonMobil, and Boeing.

A decade later when he turned 21, the Schwab account became his, and to send him on his way, I put some cash into the account. ...

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