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Is it good to be involved in the stock market?

I am a middle school student who wants to get involved in the stock market. web-marketing marketing online-marketing stocks-investing stock-market

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Jessica’s Answer

Yes! Investing in the stock market is a great way to steadily grow wealth. While there are exceptions, I wouldn't think of investing in the stock market as a plan to get rich quick. As Husna said, you have to be at least 18 years old in the U.S. to invest in the stock market. If you're very interested in getting started now, a parent or guardian can set up a custodial account for you that you'll be able to take control of once you become old enough. There, you can work with your parent/guardian to test out the waters of investing.

I'd suggest looking into Index Funds/ETFs if you're just starting out. They're relatively low risk (compared to just buying shares of stock in one company) and a great way to get a feel for how the stock market works. Index Funds and ETFs are basically funds that house stocks from many different companies. This gives you the ability to buy fractions of shares from multiple different companies instead of having to buy one share of stock from each company separately. This is a great way to spread out risk.

Let's say you decide to invest in VOO (Vanguard's ETF that tracks the S&P 500 - the 500 largest U.S. publicly traded companies). If Apple and Microsoft are both companies in that ETF and Apple, for whatever reason, goes out of business all of a sudden, you won't lose all the money you've invested. You have Microsoft and all the other 498 companies in that ETF that still hold value and prevent the whole fund from tanking. Now, if you had decided to only invest in Apple in the beginning, you would've lost most, if not all, of your money.

That's just a quick summary of one way to invest in the stock market. There's a lot of information out there for you to learn about and a ton of different options. I'd recommend checking out NerdWallet and Investopedia to learn more. They're great websites that have helped me over the years. Good luck! Investing and saving for the future is a very responsible (and fun!) thing to do.

Jessica recommends the following next steps:

Spend some time reading NerdWallet and Investopedia to better understand the stock market and investing.
Check out Two Cents on YouTube - specifically their video "5 Questions To Ask Before Investing".
Start the discussion with your parent/guardian to see if they're up for opening a custodial account for you.

This is a great explanation Jessica. suhail ahmed

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Husna’s Answer

Sure! If you are interested in the stock market, there are plenty of resources out there to learn more about it. You must be 18 or older to invest in stocks, but you could ask your parents to create a joint account with you to invest under or wait until you are old enough to invest on your own. In the meantime, it is important to know the basics of the stock market because you want to make smart decisions and avoid undue risk. Some people invest as a hobby and others make careers out of it. Learning about the economy in school is a great place to start, but if you want to expand your knowledge of stocks, you need to do research on your own as it can get incredibly complicated.
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Trevor’s Answer

Yes! A great place to start is reading the book "Automatic Wealth for Grads". It covers a wide variety of topics and a lot of them are geared towards investing. One important topic it covers is "compounding interest". As we invest money at earlier stages of life, it has more time to grow over the long-term.

As the above answers mentioned, you do have to be 18 unless you have your parents be joint-owners of the account. I recommend starting with a small deposit of money and get a feel for the stock market and how it works. The earlier the better. My favorite books that helped teach me are "The Warren Buffet Way" and "The Intelligent Investor". If you're not a book worm like myself, I recommend downloading yahoo finance app and subscribing to Morning Brew email newsletter.
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Victor’s Answer

Yes, considering you're a middle school student it's remarkable that you're asking the question early in life. Understanding and leveraging financial markets to your advantage is one of the skills that can serve you the lifetime.
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Steven’s Answer

Yes! It's one of the most convenient ways to build wealth. A good way to think about it is to think as a stock holder, you have the ability to be a co owner of some o the biggest companies in the world. Depending on risk level stocks can be a get means to invest without overhead. (unlike Real estate). Most of the richest people in the world wealth is held in stocks. One person to follow is Warren Buffet, he is one of the greatest investors of all time.
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Saniya’s Answer

Yes, it's definitely a good idea. A lot of our parents grew up with the notion that it is good to "save" - in terms of keeping cash in savings with very low interest rates. However, as you grow up, you understand that with time - saved money is actually losing value due to inflation and other factors. This is why investing either in the stock market or any assets that will bring long term growth is a good idea. It's great that you are thinking about this now, but it's best to do your own thorough research and then consult with your parents, as you have to be 18 to invest. Do explore alternative investment options such as Cryptocurrency - which is growing at a really quick rate nowadays.