13 year old stock trader

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Teen Stock Trading Seems Dangerous. It Doesn’t Have to Be.

Your Money

Gunslinging young investors are making stock ownership seem like a terrible idea for novices. But owning equities, with limits and guardrails, can teach kids plenty.

This year, Robinhood and its millions of younger-than-average customers have found themselves at the center of attention that is both comic and tragic.

“Robinhood: ‘We now allow teenagers with their parents’ credit cards to trade stocks’” went the April headline on the satire site Stonk Market. Two months later, the headlines were far more sobering, after a 20-year-old killed himself, leaving behind a note about his negative Robinhood balance.

Robinhood’s customers trade fast — often in particularly volatile types of investments — and can lose lots quickly, as my colleague Nathaniel Popper reported in July. Customers have gone to its headquarters to complain, and the company has installed a glass barrier at the front entrance there.

All of this activity frightens many parents, and with good reason. But owning just a few shares of a company’s stock is something else entirely, and it need not lead to ruin or ingrain bad investing habits. It may actually be the way to build good ones.

Learning about financial risk can be challenging for children whose families have never faced much economic hardship. Nevertheless, it’s a crucial lesson.

The best way for most people to save enough for retirement is to start early, invest most of the money in stocks early on and hang on tight for half a century. Watching with dread or exhilaration as balances fall when the market swoons or rise when it booms can lead to poor decisions. The earlier someone experiences that volatility and learns how to react to it, the better.

So what are we talking about when we talk about risk? In his lucid new book, “The Psychology of Money,” Morgan Housel explains it like so: Any goal worth chasing in life will almost always come with odds of success that are less than 100 percent. “Risk is just what happens when you end up on the unfortunate side of that equation,” he writes.

The challenge for any investor is figuring out whether any such failure is due to bad luck or to poor skill. Solving for that equation — and, hopefully, developing some humility as a result — is a lifelong pursuit.

Why stocks for teenagers, then? They offer regular score-keeping and the possibility of a bit of real pain when the stakes are lower than they are when managing larger amounts of money. Erect the proper guardrails, and stocks can teach the emerging adults in your life valuable lessons.

The Right Account

If you’re under 18, you can’t have your own brokerage account and trade without supervision.

It may be tempting to simply open a regular account and trade with your kids, but a better option may be a custodial account, which an adult sets up for a person who is not yet 18. It may come with lower taxes on any gains, although the overall balance is subject to the calculations of college financial aid examiners.

Ask questions about trading commissions, account fees and any minimum balance requirements. Also, inquire about whether you can buy fractional shares of individual stocks that may have high prices for even a single share.

The Right Rules

There are some guidelines that you as a parent, relative or mentor ought to set. Stick to basics for the first few years, which means no short sales, options or use of debt to buy on margin.

Then there are the firms’ rules, which adults sometimes ignore. Charles Schwab, Fidelity and TD Ameritrade were pretty much unanimous in this refrain: Don’t give kids the account passwords so that they can trade on their own. And if you do, don’t come running to us for help if they make some gonzo bet that doesn’t work out.

Robinhood, which does not offer custodial accounts, doesn’t want anyone handing out passwords, either. A spokesman declined to comment on how often it needs to shut down accounts because people under 18 have managed to trade anyhow.

Skin in the Game

Like so many newbie investors in the 1990s, I was set on a straight path by columns from The Wall Street Journal’s Jonathan Clements, who used his own children as guinea pigs in delightful ways.

In an interview this week, he reminded me of one failed test, where he doled out a bit of money and then held a mutual-fund-picking contest. His son lost to both his dad and his sister, but he didn’t seem to care or learn all that much from the experience.

“He was handed a bunch of chips and told to go off and play,” said Mr. Clements, who is the author of “How to Think About Money” and now edits Humbledollar.com “It doesn’t feel like losing money if you come away empty-handed at the end of the evening.”

Best, then, to have kids invest money they have earned — so they can recall the hours of toil it took to assemble their little all.

Set a Goal

In a spirited Twitter exchange and follow-up article in June, Morningstar’s director of personal finance, Christine Benz, expressed serious reservations about buying individual stocks if you’re a new investor. People who invest in them, after all, tend not to earn as much over time as those who just put their money in a mutual or exchange-traded fund that owns scores of individual stocks. Why not have novices invest in index funds from the get-go?

Well, that can be boring. Also, individual stocks get teenagers thinking about larger economic forces: Why is this company performing better than another? And the dizzying losses that are more likely with individual stocks can teach a valuable early lesson.

When Ms. Benz and I chatted this week, we agreed on this: Any stock investment must begin with defining the point of the exercise. And that depends on the teenager, too.

“What really got me stoked was achieving a goal,” Ms. Benz said. A shorter-term objective like saving for a bicycle probably would have motivated her to take less investment risk, not more. That would have had her avoiding individual stocks.

Challenge Their Choices

Collin Roberts, 17, and his teammates at Maclay School in Tallahassee, Fla., were co-champions of the Wharton Global High School Investment Competition this year. But when he wants to buy a stock, he reports to an investment committee of one: his father.

David Roberts, a financial adviser who once had to answer to the overlords at Northern Trust when he was a mutual fund manager, still puts Collin through his own paces, Collin said.

“If it’s not a good stock, I’ll usually realize it as I’m pitching it,” he said. “When I’m explaining it, I’m exposing myself to the problems.”

The Upper Limits

One downside of teen stock ownership is the upside.

Big gains can make you feel invincible. It is a real danger now, given how well some technology stocks have performed of late.

Mr. Clements has a suggestion. Set a limit on gains in any stock. Once past that point, sell enough to capture all the winnings and put them in a basic index fund.

Then you have an experiment cooking, where the money that you have left in the stock faces off against the new fund. That fund will zigzag far less than the stock, most likely. Hopefully it ends up as the better performer, reinforcing the lesson that diversifying your investments is a smart move and creates less anxiety, too.

But even if single-stock gunslinging does net a windfall for a young investor, that exposure to mutual funds will count for something. After all, they make up the backbone of workplace retirement plans, and those funds are the best routes to long-term financial security for most investors. Owning a bit of stock should help young investors know what to do by the time they enter the working world.

“With any luck, it will be the trigger that excites them about investing and turns them into someone investing in the stock market for the rest of their lives,” Mr. Clements said. “If you can do that, the payoff is huge.”

Sours: https://www.nytimes.com/2020/09/12/your-money/stock-trading-robinhood-teens.html

13-year-old Truth Jones teaches adults how to earn millions in stock market

Christon “Truth” Jones (Photo provided by EpiMedia Group)

Wealth is earned by having multiple streams of income. Most people know there is no way to amass a fortune by working their 9-to-5 jobs, and recently small business owners have realized their entrepreneurial dreams can’t be realized fully without additional opportunities for cash flow.

Thirteen-year-old Christon “Truth” Jones has managed to crack the code to the stock market as a day trader earning thousands of dollars before his freshman year in high school.

Rolling out had the opportunity to visit with the Fort Knox, Kentucky, native to learn the secrets behind his success and how he feels about advising clients older than his parents on how to do well in the stock market.

How did you get started trading at an age where most boys are focused on afterschool activities?

I started because I learned about a 14-year-old Black boy in Chicago who had made $50,000 [in] the stock market a couple of years ago, so I wanted to know how he as able to make all of this money. I asked my mom to teach me, but she didn’t know either. She decided to go and learn the information in order to come back and teach me.

How do adults react to learning stock trading tips from a teenager?

Some say that I explain it more easily than most adults do. I will say this: day trading is one the most simple and efficient ways for somebody to make money from anywhere in the world.

Click continue to read more and learn Jone’s three tips for smart investing.

Pages: 12

Sours: https://rollingout.com/2020/04/04/13-year-old-truth-jones-teaches-adults-how-to-earn-millions-in-stock-market/
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Stock trading can seem like a daunting task for newcomers, especially teenagers learning about stock trading for the first time. And you might be happy to know it doesn’t have to be.

In general, the earlier you start investing, the better. Investing during the teenage years builds valuable habits, makes the most out of compound interest and has tax advantages if done in a retirement account like a Roth IRA.

However, investing money as a kid will carry different rules than someone who doesn’t start investing until later in life.

Therefore, it’s important to understand how minors can legally invest and what types of apps allow stock trading for teens.

In this article we will talk about investing for teenagers and the best places to start your journey in investing.

We’ll also take a look at some of the basics that you need to know before you get started so you don’t make any costly mistakes along the way!

What is the Stock Market?

stock market example

Source: Robinhood

The stock market is a place for buyers and sellers to come together and trade shares in publicly-traded companies with each other.

Stock markets essentially act like auctions, where potential buyers name the highest price they’re willing to pay (called “the bid”) and potential sellers name the lowest price they will accept (called “the ask”).

When you want to purchase stock in a company, you set your bid price by placing an order on an exchange through a stock broker.

This broker finds another person interested in selling at a price you wish to pay, or closely matching your bid to their ask.

Once the market finds two or more parties interested in filling a trade at the agreed upon price, the brokers deliver the shares and cash proceeds to the respective accounts.

The actual execution of the trade price takes place between the bid and ask prices.

Neither the buyer nor the seller receives the full amount of money paid or received in the transaction because the brokers capture a portion through the spread between the bid and ask prices.

This bid-ask spread pays brokers and the market exchange for facilitating the transaction. While often small with respect to the single transaction, taken over the entirety of the volume of shares traded on a daily basis, it can amount to serious money.

Many free stock trading apps monetize this trading volume through payments for order flow.


Can You Trade Stocks Under 18?

female investor using smart phone app medium

Yes! If you are choosing to invest as a minor, (meaning you’re under 18 or 21, depending on your state of residence) you can invest in the stock market under 18.

To do so, you’ll need to open a special type of investment account for minors called a custodial account.

These accounts allow custodians, or parents, guardians or other people with ties to the minor, to invest money for the benefit of the minor on the account.

Custodial brokerage accounts act as a great way to engage teenagers who wish to learn about the stock market and trade stocks under the age of 18. They require a custodian to open the account and oversee the investment decisions made within it for the benefit of the minor.

When people contribute assets to a custodial account, the money becomes an irrevocable gift to the minor.

These accounts come in two flavors: UTMA and UGMA.

  • UGMA (Uniform Gifts to Minors Act) – These accounts allow a custodian to invest in traditional financial assets like stocks, bonds, ETFs, mutual funds and related securities.
  • UTMA (Uniform Transfer to Minors Act) – These accounts act in a similar way but also allow non-financial assets to go into the account like the deed to a house, automobiles, alternative investments in addition to traditional financial assets.

Teens can also join as an owner of a joint brokerage account with an adult, usually a parent or guardian.

Regardless of your preference for a custodial account as a UGMA or UTMA or a joint brokerage account, teens should get involved in investing and learn the markets.

Some of the wealthiest people in the world got there by investing in stocks and starting from an early age. Perhaps most famously, Warren Buffett began investing in his teens and now has tens of billions of dollars in personal wealth.

He started young and developed his wealth building habits from his early years.

Minors should learn how to invest as a teenager because they bring a unique perspective no other investor older than them can. For example, you are a consumer who sees new offerings and what potential they have.

In my case, I saw the growth and rise of online retailers like Amazon and Shopify, social media giants like Facebook and Twitter, major tech companies like Alphabet, Apple and Netflix as well as auto manufacturers like Tesla or even cryptocurrencies like Bitcoin.

Because you have dialed in interests with hyper focus on them, you might know about the next great companies entering the market because you interact with them on a regular basis.

Choosing to follow through on your projections by investing in these companies’ stocks might show you the power of conviction and even the satisfaction of aligning your money with your interests.

What is Stock Trading for Teens?

teenagers smiling medium

Stocks act as some of the best investments for teenagers because they tend to provide a long-term focus on growth and higher returns.

They carry higher risks traditionally than investments like bonds, but young investors can tolerate this volatility due to their long investment horizons.

Starting to invest as early as possible makes complete sense as the practice relies on building sustainable habits to last a lifetime.

This means taking time to research stocks, vet different index funds, understand how companies make money and much more. Though, these efforts don’t always fixate on the long-term orientation of investing I tend to favor.

Today’s news headlines rarely take into account long-term views, meaning the most reliable purpose for investing sustainably to build wealth gets lost in the news cycle.

Instead, companies like GameStop, cryptocurrencies like Dogecoin or newfangled investment vehicles like SPACs steal the limelight.

While these might be the source of some people who turn money into more money in great quantities, it rarely pans out that way for the retail investor following the herd to take advantage of some passing craze.

My personal investing style might also be the most boring: investing in low-cost index funds to let your wealth compound in a diversified portfolio over many, many years.

However, many teens consider index funds less exciting than individual stocks and want to own shares of companies they know and love.

Should Teenage Investing Include Individual Stocks?

teenager parent managing money smartphone medium

If you choose to start investing in individual stocks, try to stick to blue-chip stocks. Blue-chip stocks come from established, well-known companies that are generally more stable.

Blue-chip stocks might not represent the best choice for aggressive growth, but they do offer a steadier return than other types of stock investments.

Larger companies carry less risk in general because there is already too much money at stake to risk doing something drastically different that could tank your share value–and their company as well!

One investment newsletter service to consider is AskFinny. This personal finance tool makes learning about finances and investing fun for all ages by providing engaging quizzes, breaking down complex topics in easy-to-understand terms and upskilling teens and young adults interested in learning how to manage their money.

Consider signing up for a 7-day trial to see if it would make a valuable resource for you to teach your kids about personal finance.

When using a long-term mentality for investing in the best stocks for kids, you can see your account balance grow over time without worrying about the latest tweet from Elon Musk and how it’ll affect any number of investments filling the news headlines.

Investing in individual shares can be an exciting way to increase your wealth and build up appreciating assets over time; however, it’s important to know what you’re getting into before diving right in without any knowledge or understanding.

Consider subscribing to a stock picking service that has performed well over many years and developed a sound track record and investment vetting process.

These can easily cut down your investable selection of stocks to focus only on ones that have passed numerous quality criteria from highly-regarded and well-respected stock advisor websites and services.

Once you get these stock selections, and you have done some research on trading practices, you might consider starting to invest.

Make sure this active type of investment strategy suits you and then start investing now while you still have years to earn money and save ahead of you.

You might also consider investing in index funds like VTI to see how these investments perform in comparison. If nothing else, it’ll build instant diversification in your portfolio through an all-in-one type of investment.

6 Apps that Show How Teenagers Can Invest in the Stock Market

young adults laughing medium

The stock market can be a tricky place. It can be really rewarding if you choose wisely and your stocks go up – or devastatingly disappointing if they don’t. That doesn’t mean investing as a minor is off limits though!

In fact, investing can be as simple as buying one index fund and letting it sit idle. Though, that’s not always what a teenager wants to save up for and buy.

That’s where individual stock trading for teens comes in! You can still invest for the long-term, meaning without a lot of the risk that comes associated with day-trading, but you can choose stocks individually and see how they perform over time.

It’s also less time consuming than day-trading because you only buy and sell the companies you like when it suits your needs. That way you don’t have to worry about being glued to your computer screen all day wondering what stocks to buy.

By beginning with small amounts of money, teenagers can learn how to trade stocks in their portfolio before serious amounts of money get put at risk.

There are a few ways to trade individual stocks as a teen without being too risky and still making it fun:

You can open custodial accounts through apps like M1 Finance to trade along with parents or family members. This will let you learn how to trade stocks as a teen under close supervision.

Likewise, you can trade exchange-traded funds (ETFs) like passively-managed index funds to diversify your portfolio with a single purchase.

You can also invest in actively-managed exchange-traded funds which come managed by professionals who have more experience investing than you do.

You can also open up low-cost investing apps for beginners to show you how to invest in diversified investments from the start and build a substantial account balance over the years.

Some apps geared toward teenagers learning to invest include:

1. Acorns ($10 bonus)


  • Available: Sign up here
  • Price: Acorns Lite: $1/mo, Acorns Personal: $3/mo, Acorns Family: $5/mo

Acorns is the signature app loved by Millennials and Gen-Zers because it allows users to start with very small amounts of money and grow their balance into larger figures through “Round-Ups”.

Round-Ups are small purchases that you make with your linked Visa debit card through the Acorns app.

For example, if you buy an espresso for $3.75 and Acorns is connected to the purchase, then it will round up to $4.00 and invest the difference of $0.25 into stocks automatically!

This also makes one of the best investing apps for college students because you can avoid the monthly fees if you have a .edu email address from school.

Learn more in our Acorns review.

Our Micro-Investing App Pick

Acorns | Invest, Earn, Grow, Spend, Later
Acorns | Invest, Earn, Grow, Spend, Later
  • From acorns, mighty oaks do grow. Grow your oak!
  • In under 5 minutes, get investment accounts for you and your family, plus retirement, checking, ways to earn more money, and grow your knowledge.
  • Famous for investing spare change automatically through Round-Ups, this all-in-one financial app helps younger generations start investing earlier.
  • Just $3 or $5/mo.
  • Bonus: Get $10 to start & $75 for taking specific actions in an Acorns Checking account*
Learn More

* Must receive 2 or more direct deposits of at least $250/deposit and spend at least $500 from the Checking account within 3 months of first qualifying deposit. $75 bonus will be deposited into your Acorns account within 45 days.


2. Greenlight App

greenlight sign up

  • Available: Sign up here
  • Price: Free 1-month trial, $7.98/mo after for Greenlight Card + Invest

Greenlight is an investment account that comes paired with a debit card for kids.

It’s easy to use and can double as a savings account for your teens. The app will teach you the basics of investing, how to trade stocks, ETFs, etc. with market capitalizations of $1 billion or greater.

In other words, no small cap stocks, and more the stocks for kids with broader brand name appeal.

It works best if parents are involved in the process because it requires linked brokerage accounts from custodian banks or brokerages.

Read more in our Greenlight Card review.

Our Investing & Debit Card for Kids Pick

Greenlight | The Investing App and Debit Card for Kids
Greenlight | The Investing App and Debit Card for Kids
  • Greenlight offers flexible parental controls for each child and real-time notifications of each transaction.
  • Greenlight is the only debit card letting you choose the exact stores where kids can spend on the card.
  • Parents can use this app to teach them how to invest with a custodial account through Greenlight Max
Learn More


3. EarlyBird ($10 Bonus)

earlybird sign up

  • Available:Sign up here
  • Price: $1/mo (first $200 managed free); $2 per gift (for the giver)

EarlyBird is a mobile app which allows parents and guardians to set up a UGMA account to gift money for investments to their children.

This app provides a convenient and inexpensive way to gift money to a child, with funds available to go toward any expenses which benefit the child.

When providing a gift, givers can record a video to go along with their gift, personalizing these moments which last a lifetime. If you’d like to give but the recipient doesn’t have an account, you can text them a link from the app to the recipient’s phone number.

When opening an account to invest for your children, you can select from five different portfolios, ranging from conservative (100% bond ETFs) to aggressive (100% stock ETFs).

All portfolios rely on diversified ETFs to achieve your investing aims, removing the complexity of conducting your own research or selecting specific investments.

You can open an account and have the first $200 managed for free, upon which the account charges $1 per month per child. Further, each gift made incurs a $2 processing fee payable by the giver.

Consider opening an EarlyBird account today and get $10 to get you started after opening your account.

EarlyBird | Custodial Account
EarlyBird | Custodial Account
  • EarlyBird empowers parents, family and friends to invest in the next generation through custodial accounts
  • Send and receive financial gifts to invest in children
  • Offers fixed portfolios of ETF-based investments based on the child's age, investment goals, time horizon, risk tolerance and other factors
  • Get $10 to invest by opening an account today
Start Investing

Only available to US residents who are new, first-time EarlyBird users. By clicking this link and opening an account, we earn a commission at no cost to you.


4. Stash ($5 bonus)

stash sign up

Stash is another all-in-one personal finance app geared toward helping every American start investing for the first time.

It caters toward beginners looking to get started on their financial journey and offers a large financial literacy library to learn about different finance topics.

Further, Stash offers their “Stock-Back” solution which allows users to earn stock on purchases made on their linked debit card. Over time, these additional stock contributions can build your portfolio.

Consider signing up for Stash if you’re looking for a simple investing and banking solution for teenagers. Stash grows with the user and makes your money work for you.

Stash | Investing Made Easy
Stash | Investing Made Easy
  • Stash is a personal finance app that simplifies investing, making it easy and affordable for everyday Americans to build wealth and achieve their financial goals.
  • By signing up and making a $5 deposit, Stash will also provide a $5 sign up bonus.
Get Your $5 Bonus


5. M1 Finance ($30 bonus)

m1 finance

  • Available: Sign up here
  • Price: Free trades, $125 subscription to M1 Plus required for custodial account

M1 Finance is an all-in-one personal finance solution that allows new investors to set up an account in seconds. If you want to invest as a teenager, you’ll need to apply for an M1 Plus subscription. The company has a limited time offer of the first year for free ($125 value).

The service offers investors the ability to create Portfolio Pies, or a diversified portfolio that rebalances to help you achieve your money goals.

M1 Finance is a service designed for self-directed investors by offering flexible, customizable and automated financial solutions. The platform manages your money intelligently based on how you want, for free.

Consider signing up for an M1 Finance custodial account today.

Our Robo-Advisor Pick

M1 Finance | Smart Money Mgmt
M1 Finance | Smart Money Mgmt
  • M1 Finance's Smart Money Management gives you choice and control of how you want to invest automatically, borrow, and spend your money—with available high-yield checking and low borrowing rates.
  • Special Promotions: Open an account and make a $1,000 deposit within 14 days to receive a $30 bonus and get 1-year free of M1 Plus ($125 value).
Learn More Our Review


6. UNest ($25 bonus)

unest sign up

  • Available: Sign up here
  • Price: $3/mo: Regular, $6/mo: Family

UNest is a new custodial account that allows parents to invest money for their kids for needs beyond just education but events like a new car, a wedding, vacation or anything else a minor might want some day.

UNest even offers a free matching $25 sign up bonus for opening an account and making an initial $25 contribution.

You can also learn how to get free stocks through offers like these with a number of useful investing apps.

UNest | Easy College Savings App
UNest | Easy College Savings App

UNest acts as a tax-advantaged investment account for kids. It allows them to save for an education, first car, house, wedding, or even for their financial security as an adult.

  • Investment options - 5 options suited to your needs
  • Taxes - <$2,200 of annual tax benefits and first $1,100 in earnings are tax-free
Open Your Account


Can Teenagers Invest in a Custodial IRA?

A great option for teens to start investing is by opening a custodial Roth IRA (or traditional). This allows teenagers to invest money toward their retirement when they will likely start having earned income.

A custodial IRA is a special type of retirement investment account that you can set up for an underage person, especially for one who has earned income.

For Roth IRAs, unlike traditional IRAs, the investment contributions are not tax-deductible but will likely get hit with very low taxes because a teenager won’t earn as much money as they will later in life.

The teenager can use an app like M1 Finance to invest in index funds that the parents or family members buy for them with contributions to the account.

As the account balance grows and the teenager learns to follow along, they can understand how stock trading for teens can build serious wealth.

Why Parents Should Be Involved in Stock Trading for Teens

young woman investing on smartphone

Stock trading is a risky endeavor if not handled correctly. Investments can quickly sour and turn bad.

In order to avoid disaster, parents should be involved in stock trading for teens. Otherwise, you’re likely to have a lot of gunslinging young investors ruining what otherwise could be a fantastic start in equities for teens.

By establishing defined guardrails and clear limits, teens can take that first step to learn a valuable skill early in life.

For one, minors shouldn’t be allowed to trade sophisticated assets like options, stock market futures, forwards, commodities, or anything with that level of risk profile.

Plain stocks and ETFs should suffice as learning is the primary goal, not unsuitable risk.

In recent history, apps like Robinhood captured headlines not for democratizing access to markets, but by doing so in far too flung a fashion.

In fact, one 20-year-old killed himself after seeing some alarming messaging in his app after making what seemed like an innocuous options trade on Amazon stock.

Certainly taken to the extreme, but this never should have happened with the easy access to trading options.

Individual stock trading for teens shouldn’t involve fast trading – especially not in volatile types of investments like options or cryptocurrencies – because that can quickly turn into capital losses.

But owning a handful of shares in a company you follow or admire is something else entirely.

It gives you skin in the game to learn about the company, the broader market and instill good money habits to build wealth.

Custodial Accounts with Safeguards are the Answer

parent sitting with kids laptop medium

Parents can help their teenagers start investing with a custodial investment account. It’s easy to start and can be a useful way to teach kids in a low-risk environment how to start investing.

There will likely be volatility, even in this environment. After all, it is the stock market and it indeed carries risk- no matter your investment choices.

However, learning how to deal with those swoons in the moment from parents or guardians can teach teens how to react and build these behaviors from an early age.

This is much better than filling with dreadful emotion when a stock tanks or filling with exhilaration when one rockets to the moon.

These types of emotion don’t relate to sustainable investing strategies- that’s gambling plain and simple.

Services like Fidelity’s Youth Account allow teenagers to invest without a custodial account, letting them trade unsupervised. This type of arrangement is fraught with risk and is not an ideal environment for teaching investing for kids.

Instead, parents can use the above investing apps to track stocks and monitor portfolios of their teenagers’ investments while providing guidance.

As the account balance grows, so does the teenager’s understanding of how stock trading for teens works.

When they are ready to start investing on their own, parents should help them find a broker or advisor who understands this age group’s needs in terms of risk tolerance.

However, the apps highlighted above also grow with the investor, meeting their increasing needs with added features and functionality.

As they grow, they’ll get more comfortable with risk because they’ve seen it before through investing in a custodial account.

As a teen, stock trading allows you to keep score of your decisions with the possibility of feeling pain on the losses, but considerably less so because of the smaller investment account balance than an adult would have.

By placing the proper guardrails on investing young, parents can teach teenagers valuable life lessons. Left unchecked and you’re showing kids how to gamble, not how to invest in a secure financial future.

Sours: https://youngandtheinvested.com/stock-trading-for-teens/
HOW I STARTED TO INVEST AT 13 - (Investing For Teenagers.)

Are you currently investing in stock? That is the question because the time is now. You should be. With everything that is going on, even if you have not invested before, now is the time to do so. There are so many apps now available for novice investors, so there really are no excuses when it comes to understanding the stock market and becoming your own guru. Robinhood is one app that allows you to ease your way into it seamlessly and invest at your own pace with the most minimal fees. Try it for free: https://join.robinhood.com/patrict2541.

Have you heard of the 13 year old accomplished day trader Christon Jones? We have, and Jones was kind enough to provide us all with extremely useful key tips to fiscally surviving in a tanking market that we can all use no matter your age:

Learn how to invest in the stock market. It’s important for one to fully understand their goals and objectives when investing in the stock market. Blindly going into the market without a definite goal will cause you to lose unnecessary cash and time. So be specific, understand your risk tolerance, determine specific industries and choose companies that you patronize currently.

Learn how to trade options. This step requires you to study the industry and the particular company that you are looking to invest in. You should research its past performance, so that you can decide which direction you predict the stock to move. Predict how high or low the stock price will move in comparison to its current price. Also, you will need to try and predict the time frame for movement for the stock.  

Learn call options. Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity, other asset or instrument at a specified price within a specific time period.

Learn put options.put option is a contract giving the owner the right, but not the obligation, to sell, or sell short, a specified amount of an underlying security at a pre-determined price within a specified time frame. The pre-determined price the put option buyer can sell at is called the strike price.

Learn how to monetize cover calls. This type of option is best used when the investor would like to generate income off a long position while the market is moving sideways.

Understand the difference between a correction and recession. During a correction, prices fall significantly across a single asset, industry or an entire market. A recession occurs when an entire economy contracts for more than two months.

Invest in dividend-paying stocks only. Investing in stocks is a good way to grow wealth in the long run, and it’s a wise strategy to employ in the course of saving for retirement. But if you’re going to put money into stocks, it pays to load up on those that pay dividends.

Find gems. gem is defined as something that’s prized. A hidden gem, then, is something that is prized that no one knows much about. With the stock markets soaring, gem stocks are often those that are undervalued compared to the overall market or their peers.

Take advantage of discounted stocks.discount on stock occurs when the stock’s par value is higher than the issuing price. The difference between the greater par value and the lesser issue price is considered the discount. This represents the amount of the par value that investors were unwilling to pay for when the stock was issued.

Use margins. Over time, your debt level increases as interest charges accrue against you. As debt increases, the interest charges increase, and so on. Therefore, buying on margin is mainly used for short-term investments. The longer you hold an investment, the greater the return that is needed to break even.

About Christon Jones

Mr. Christon “The Truth” Jones is a 13 year old accomplished day trader, entrepreneur and an international speaker. Truth has spoken in 3 continents as a Certified Les Brown Speaker, while also writing “3” international best-selling books. As a child prodigy, Truth continues to excel at youth sports as he is also an MVP for All American Youth Football.

Christon “The Truth” Jones is on a mission to help 1000 people become successful. Through his company (Return on Investment, LLC), where he primarily focuses on teaching the principles of trading while achieving upwards to 6 figures in return.  

During this time of uncertainty “Truth” has counseled and coached many of his students(Median age of 30 to 50 years old) into earning $15K or more a week by trading in our current market. Truth is determined to educate the market on proper investment strategies to survive during these troubling times. 

Truth has been featured in multiple outlets due to his unyielding success in the industry at his age. He has appeared on ABC, NBC, CBS, & FOX. He has also been featured in Black Enterprise and Black Business.com

Patrice Tartt


Patrice Tartt is the Editor-in-Chief of MillBuzz.com, bestselling author, entrepreneur, speaker and the Dream Big Writing Coach®. Patrice is based out of the Washington, D.C. metro area, and has been quoted and featured in Inc., Everything Girls Love, ESSENCE, BET, Houston Defender, The Network Journal, Publishers Weekly, Parents Magazine and She Knows. She has also contributed to ESSENCE, Black Enterprise, Sheen, HuffPost, MadameNoire, EverythingGirlsLove, Upscale Magazine, and Curly Nikki. In her free time, she enjoys spending time with her son, traveling, and shopping. Patrice is also a member of Alpha Kappa Alpha Sorority, Inc. Stay connected with Patrice through Instagram, Facebook, and Twitter @PatriceTartt.

Sours: https://www.millbuzz.com/10-tips-on-how-to-invest-in-a-tanking-market-with-13-year-old-day-trader

Stock trader 13 year old

13-year-old Day Trader, Christon ‘The Truth’ Jones Talks Trading/Stock, Faith and Football

Interview by Chris Jordan|

“I saw a 14-year-old (at the time) black boy out of Chicago make $50,000 from buying Nike stock. And like anyone I wanted to know how he was able to make all that money.”

Christon ‘Truth’ Jones, of The Truth Jones

Barely standing 5ft 6in, 13-year-old day trader, Christon ‘The Truth’ Jones, is on a mission to help 1000 people become successful one stock at a time. This young mind is known for speaking well in regards to financial literacy, goal setting, and bullying. ‘Truth’ has released 3 books thus far and has been featured in multiple outlets due to his unyielding success in the industry at his age. Through his company, Return on Investment LLC, Jones is on a mission to help 1000 people become successful by primarily teaching the principles of trading.

​”During this downtime, I’m actually investing in the stock market and showing people how to day trade”, was Christon’s response when asked what he was doing during this time of uncertainty. The young entrepreneur was asked how he got into the day trading, his response: “I saw a 14-year-old (at the time) black boy out of Chicago make $50,000 from buying Nike stock. And like anyone I wanted to know how he was able to make all that money.”

Take a listen to his conversation with Journalist/Host Chris Jordan:

Learn more about Christon ‘Truth’ Jones by visiting his website and social media at:

IG: @Thetruth2024
Facebook: Christon ‘Truth’ Jones

Sours: http://vmhmagazine.com/13-year-old-day-trader-christon-the-truth-jones-talks-trading-stock-faith-and-football/
Christon Jones On Making Over $1M In Trading Stock Options At 13 Years Old

Now teenagers can trade stocks with Fidelity's new youth investing accounts

Of the 4.1 million new accounts that Fidelity added in the first quarter of 2021, 1.6 million were opened by retail investors 35 and younger, an increase of more than 222% from a year prior.

Fidelity's new youth account, which was first reported by The Wall Street Journal, will offer clients a debit card with no minimum investment at account opening.

Young investors are not allowed to trade options and are not allowed to trade on margin, according to Fidelity chief marketing officer David Dintenfass.

Dintenfass said during the pilot program about 30% of teenagers were trading stocks. The group that traded, invested in bigger equities like the S&P 500 index fund, Apple and Tesla.

"Our goal for the Fidelity Youth Account is to encourage young Americans to learn through action and foster meaningful family conversations around financial topics," said Jennifer Samalis, senior vice president of acquisition and loyalty at Fidelity Investments, in a press release.

When the teenager reaches the age of 18, the account will transition to a standard brokerage account.

As of the first quarter, Fidelity has 83.4 million total accounts and $10.4 trillion assets under administration.

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Sours: https://www.cnbc.com/2021/05/18/now-teenagers-can-trade-stocks-with-fidelitys-new-youth-investing-accounts.html

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Even as a child, Harshit Tripathi’s ambitions were more shaped by what he did not want than what he did. And number one on the list of things he didn’t want was a job. “To start a business in India, you need all these legal things and a great team to support you. But with stock market trading and investing, you can do it alone,” says the 18-year-old school student. “When I first became interested in the stock market at 16, I went to a bank but they hire sales managers to make you trade a lot so they get brokerage. I didn’t know the fundamentals and followed somebody’s advice and ended up with Rs 50,000 in losses,” says the resident of Etawah, UP, a town 120km from Agra.

Over the last two years, however, Tripathi has immersed himself in the world of stocks — spending what he sheepishly calls “a lot of money” on courses and books related to the subject — and has tripled the amount of money he has put in over the years, given to him by his family once they saw he knew what he was doing.

To start a business in India, you need all these legal things and a great team to support you. But with stock market trading and investing, you can do it alone

Harshit Tripathi, 18 years old

Teenagers may not be the demographic typically associated with the stock market, but there is a growing population of teens across the country who are beginning to dip their toes in the world of investing and trading.
Under SEBI rules, a minor can have a demat and trading account, but cannot actually buy and sell stocks. Many teens get around this by using accounts belonging to their parents or siblings.
Data shows that there is a growing interest in stocks among younger people; in the first nine months of 2020, 5 million new demat accounts were opened according to the Central Depository Services Limited. At the country’s largest retail brokerage, Zerodha, 69% of its investors are in the 20-30 age group, up from 50-55% pre-Covid, according to a Forbes report. While the average age of their users is currently between 28 and 35, this will probably come down to 26-27 in the coming years, according to Nikhil Aralimatti of Zerodha.
Ishan Kabra, a 17-year-old who has been investing and trading for a year, and is now dabbling in day trading, admits that many teens are motivated by the lure of easy money. “I read somewhere that one Reddit user turned $50,000 into $11 million with GameStop stock. People are more interested in that than learning about the key principles of investing.”


I read somewhere that one Reddit user turned $50,000 into $11 million with GameStop stock. People are more interested in that than learning about the key principles of investing

Ishan Kabra, 17 years old

The dramatic rise of “meme stocks” like GameStop — and the unbelievable fortunes that some made — is a relatively new phenomenon. But the stock market has for long been seen as a place to make a very fast profit. Add to this the psyche of a teenager who wants everything yesterday, and there could be danger ahead. “With teens, it is a common problem for them to be very aggressive and impatient in the market, it can be like gambling for them. They want to put in Rs 5,000 and double it in a month,” says Pravin Khetan, founder of iPlan Education, who specialises in financial education. “About 60% of the students that come to us are in college or younger,” he says.

So, why is it dangerous for teenagers to want to make a quick buck on the stock market? Khetan explains: “There are advisory services in the market operating unethically. For instance, there are people doing what is called ‘dabba trading’. That means they don’t take upfront money and let you trade. I have seen teenagers fall into this situation where they have lost the money they took from their parents so they do this to recover it, only to lose way more money.”
One of the reasons teenagers are so blind to the risks of the market could be because most of them don’t earn; they play with their pocket money or with gifts and prize money. Vipul Sharma, an 18-year-old who runs a popular Instagram account about the stock market with 62,000 followers, agrees that young players need to seek information before trading. “One of my friends started this year and lost Rs 12,000 in 15 days. One of them sold his phone and was trading with that. I have told them to first understand how this works but they say no, we just want to make money.”

Vipul Sharma, an 18-year-old, runs a popular Instagram account about the stock market (Pic credit: Instagram/Mastermindinvestor)
Vipul Sharma, an 18-year-old, runs a popular Instagram account about the stock market (Pic credit: Instagram/Mastermindinvestor)
read caption

Vipul Sharma, an 18-year-old, runs a popular Instagram account about the stock market (Pic credit: Instagram/Mastermindinvestor)

Not all teenaged players are in the market to make money quick. There are some, like 17-year-old Shreyansh Gala, who study the market and learn from it. Gala already has six years of experience with stocks. “I love the idea that you can be a part-owner of a business,” says the Mumbai resident who recently won the Global Teen Investment Competition. “Whatever money I get — whether that’s my pocket money of Rs 4,000, money from relatives on festivals or for competitions I win — I put at least 50% into stocks.”


I love the idea that you can be a part owner of a business. Whatever money I get — whether that’s pocket money of Rs 4,000, money from relatives on festivals or for competitions I win — I put at least 50% into stocks

Shreyansh Gala, 17 years old

Gala says investing has taught him many lessons that he can apply to the rest of his life, but patience is a big one. “For stocks, we buy when the price is low and we sell when it is high. The same concept applies for different areas in life,” he says. Recently, for example, he wanted to buy a pair of shoes that were Rs 8,500 but he decided to wait for a sale and got them for Rs 3,000. “Earlier, if I had seen a product I liked, I would have bought it on the spot,” he adds.
Because most teen traders have little money, knowledge, or experience, their participation in the market could be a flash in the pan. Deepak Shenoy, CEO and founder of Capital Mind, an investment research and wealth management firm, is skeptical about how long such interest will last. “It’s a bull market so there will be interest. When the market goes down, a lot of people vanish. It’s great to have a lot of money in a bull market but the real test comes when it’s a bear market,” he says.
Shenoy may well be right, but it’s interesting to see that the trend of young traders is an international one. There has been a growing interest from young investors across the globe, fuelled by trading apps like Robinhood. Bloomberg charted the rise of the TikTok trader with hashtags like #stock and #invest notching up millions of views.
Though Nikhil Kamath, Zerodha co-founder, hates comparisons to the controversial American app which pioneered zero-commission trading, his company is often dubbed the ‘Robinhood of India’ and there’s no denying that it has allowed younger people to have easy access to the market. Aralimatti says that when Zerodha went from offline to online, they saw the age of investors drop dramatically. “You can’t expect a 20-year-old to sign 40 pages, courier it, wait for a week and then start investing,” he says. However, he believes the biggest factor is being introduced to it by someone else.
Illustration: Chad Crowe

Sours: https://timesofindia.indiatimes.com/india/with-pocket-money-loans-from-parents-these-teens-are-betting-on-stocks/articleshow/81269941.cms

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