If you're an advocate of these two rules -- "It's never too early to start investing" and "Invest in what you know" -- then Johnson & Johnson (NYSE:JNJ) is an ideal pick for baby's first stock. Consider: As infants, we were tended by the trinity of Johnson's Baby Powder, Oil, and Shampoo. Our preschool cuts healed under the protection of Band-Aid Plastic Strips. And we sharpened our teenage views through our Acuvues.

The success of J&J owes much to its decentralized management, which cultivates entrepreneurship across more than 230 operating companies around the world. The parent company is essentially a mutual fund diversified across three lines of business: consumer products, medical products, and pharmaceuticals. At some point, almost everyone has used the consumer products. But for the serious investor, the steady growth in medical and pharmaceutical products truly attracts attention. Now, in the first decade of the 21st century, the company is positioned to benefit from a demographic change of historic proportions -- the relentless march of baby boomers to old age. J&J has an expanding lineup of drugs, joints (as in knee and hip implants), and medical devices that the growing population of seniors will need.

Great stock at the right price
If you're shopping for baby's first stock, the bargain bin is a smart place to look. Right now (and probably for a short time only), J&J shares are on sale, in part because of the confusion over its on-again off-again deal to add Guidant (NYSE:GDT) to its collection of operating companies. Management wisely deferred to BostonScientific (NYSE:BSX) after bidding reached a price that many analysts considered exorbitant.

The company has seen some softening in pharmaceutical revenues, which also contributes to the current buying opportunity. But this is a temporary blip in the larger perspective. J&J has issued dividends to shareholders every quarter since 1944. The dividend has risen each year for 43 consecutive years. Moreover, J&J has increased sales for 72 consecutive years and posted double-digit earnings increases for 20 consecutive years.

Baby's bottom line
Do you see baby as a budding value investor? Buy J&J. Do you think baby should acquire a taste for dividends? Buy J&J. Does market volatility cause a headache that even Tylenol can't help? Buy some shares of J&J and call me in 18 years. Whatever the investment principles you want to nurture in your newborn niece or nephew -- steady growth, return on capital, free cash flow -- J&J is a top contender.

For infant investors toddling toward their teens, Johnson & Johnson is a winning pick for the long term. Whether the goal is a college degree or an early retirement, the company's shares should do their part to turn the goal into a reality.

A joyful abundance of Foolishness awaits your little tyke. Click here to see what other financial gifts are in our Foolish baby shower basket for your littlest loved ones.

Fool contributor Doug Short bought his shares of JNJ about three years ago. If he'd owned them since birth, he'd be writing this advice from a luxury liner in the Caribbean. The Fool has a "no more tears" disclosure policy.