Time to have “The Talk”... The Investing Talk

Investing is a big step toward financial independence, and your kid is almost ready to get started! But before they do, it’s a good idea to talk about the ins and outs of investing together so they know what to expect.

What’s in a Copper portfolio?

Copper’s three portfolio offerings include:

• The Moderately Aggressive Portfolio
• The Aggressive Portfolio
• The Extra Aggressive Portfolio

All 3 of our custom portfolio types are designed to provide an attractive tradeoff between risk and long-term return through a diversified set of core stock categories represented by a low-cost, passive exchange traded fund (ETF). These trades happen on an exchange, just like stock.

Our portfolios don’t contain bonds; they offer and maintain exposure to numerous companies kids and teens know and love, along with 11,000+ more stocks across the global investable universe. All portfolios feature the blue-chip stocks that many young investors are interested in. So no matter their risk appetite, there’ll be no missing out on those opportunities!

What goes into portfolio pairing?

Since every investment involves a degree of risk, we want Copper investors to feel confident in their portfolio. Your child is a complex individual, and Copper’s research-backed methodology takes that into account! The Investor Questionnaire helps us understand our soon-to-be investors so we can pair them with the most suitable portfolio for their investing goals.

Copper’s questionnaire simplifies the process of understanding your kid’s willingness and ability to take risks, and it’s how we determine their investment comfort zone. Our questionnaire touches on multiple aspects of your child’s financial persona to find the Copper portfolio that best suits them, including:

• Age: This influences risk capacity, given their objective stage in life as well as potential investment time horizon and future income stream(s).
• Income: Although kids may or may not have a consistent paycheck, more income typically allows for greater capacity for risk-taking (and vice versa).
• Net worth: Though our research indicates that most teen investors have minimal assets, greater net worth typically allows for greater capacity of risk-taking (and vice versa).
• Investment objective: A teen’s preference for maximizing potential investment gains versus attempting to minimize losses influences their capacity to take on risk.
• Investment horizon: A longer time horizon for investments typically allows for greater capacity of risk-taking as opposed to a shorter one that typically allows for less capacity for risk.

After analyzing your kid’s questionnaire responses, Copper instantly pairs them with a portfolio that matches their investment comfort zone. As the parent (and account owner), you can review their recommended portfolio in the app to ensure it matches your family’s investment preferences.

What happens after they invest?

Once your kid starts investing, we’ll take care of the details – reinvesting dividends, reassessing the underlying investment strategy, and periodically rebalancing portfolios to ensure they remain optimally diversified. Just remember to keep talking about investing with your family so they keep learning and growing on their path to financial success!

And remember: if the recommended portfolio isn’t quite the right match after all, that’s no problem. Parents can update questionnaire responses to realign their kid’s risk tolerance and portfolio recommendation at any time. If you see anything you need changed, please reach out to us by logging into the app, navigating to Support chat, and entering “teen portfolio assignment.”