Fundamentals to Financial Stability: How to Help Your Teen Build a Strong Foundation in The Stock Market

???So, you’ve found yourself in an interesting position: Your son or daughter has taken up an interest in the stock market. Not surprising at all, as it seems like for the first 2 months of this year all we’ve been catching on the news waves have been stories of short squeezes, Gamestop, bitcoin, and the wonders of buying the dip. I can attest to this, as during the height of the GME episode all eyes in my highschool were peeled on the charts, and heated discussions would erupt in the halls towards the question… is Gamestop a $2 stock or a $500 one? Nonetheless, more and more young people are getting interested in the market, and this is awesome! Getting the next generation hooked on personal investing, and teaching them how to correctly manage their own money can pay dividends (literally!) toward their future. Before I give some recommendations as to how to help empower a wanna-be young Warren Buffet or Cathy Wood, let me give you my story of how I started investing at 15 years old to help give a better picture of the key points to follow.

???In the winter of 2018, I was in despair. Besides several family losses, my (theoretical) enterprise called “Apollo Sneakers”, which operated under the guise of buying hyped-up sneakers and selling them for profit had not yielded one single dollar of such profit or one shoe to show for my efforts. The biggest problem for me was that it was a high-stakes market- good shoes would only come out once a month, and there was no public consensus beforehand besides guesses as towards a resale value. Oh, if only there was a convenient marketplace trading some other type of valuable asset that was open almost every weekday from 9:30 in the morning until 4 in the afternoon!

???Despite the sarcasm, that's actually how I started thinking about investing; that, and the website that I tried to sell my sneakers on was called “StockX - The Stock Market for Things''. So, as the winter drew on, I told my parents my intentions of trying my hand at investing, citing it as something I could do over the summer, and then reevaluate. In between study halls and during classes I roamed CNBC, Fox Business, and Yahoo finance, trying to grasp this massive market and truly understand it. When my father recommended reading, I picked the most basic of books; “The Stock Market for Dummies” and the bible of valuations and value investing, “Securities Analysis” By Benjamin Graham, of which I've only read about 100 pages. I also talked with several financial experts in my community, who each gave me their own views on investing and how to approach it correctly. However, when it came down to hitting the road and actually investing, I spent a lot of time in school- by that, I mean paper trading. All of this came together in February of 2019 when I placed my first trade on the market; 10 shares AAPL, 10 shares BABA. That quick summer investing experiment has lasted to the present day and beyond. The market has become an extension of myself, and I can't be more grateful for the people I've met and the experiences I've been fortunate enough to live through; from being on Fox Business News to getting to place trades on the Eiffel Tower and so much more.

???So, now that we’ve established how I came up from a bored 15-year-old to where I am today, what could I recommend to help those with market-interested-teens? I offer these bullets of some of the keys that helped me the most:

1. Prioritize Newsflow- One of the first things that I did when I thought of becoming an investor was to read at least 5 news articles a day, particularly on market-related topics. Push to have your teen read up on websites like Investopedia, CNBC, Fox Business, and CNN. Also, if possible, attempt to provide some reports on certain stocks, like those from MorningStar and The Street. Just the basics- AAPL, TSLA, and MSFT should do for now.
2. Friends to Mentors- Try to have them meet someone who knows their way around finance. This can be anybody honestly- a family member, friend, or colleague, especially one who is/was directly involved in finance. Even if it's just a quick Zoom call, getting to speak with these individuals who have been through all the hills and valleys the market can toss out was just the thing to help me grow confidence in what I was about to do.
3. Kill the Hype Immediately- I know that many kids right now are eager to pull off trades like those seen on such online chat boards such as R/WallStreetBets and more. However, this dream of massive gains through risky options bets must be squashed immediately. Personally, I think nobody under 18 should be trading options. The risk from a mistake on a stock is minimal depending on the purchase size. Yet, a small mistake on an options trade could mean a crippling loss to any trader- see the story on a Robinhood trader who committed suicide after he believed he racked up a loss of over 700k dollars. Just tell them to go slow and steady, and stick to stocks and ETFs for the first few years before branching out.
4. Put on the Training Wheels- Paper Trading (PT), or using a platform where one can place trades with fake money on a synced up market, was the proving grounds I needed to grow into the role of an investor. In fact, where I could have placed my first trade on the day my TD account was funded, I was more or less on around my 50th based on my paper trading portfolio. Not only did I use my PT account for building confidence, but also for building a solid trading plan and learning how to correctly value and analyze a stock. Getting this chance to learn by doing was absolutely invaluable towards my overall introduction to the market and has built systems of trading that I still use to this day.

In the end, a lot of this story is how I did it. Not everything will go according to plan, and for some teens, this is just another TikTok trend. However, let it be known that this is possible; helping to start a solid financial foundation for a bright future is most certainly in reach for all.?

I know that I still have a lot more to learn myself, but I certainly hope that this has helped to give courage to those who are facing/might face this sort of situation. And, as always, I am more than happy to PM to answer any questions or even to talk with a teen to help them get to their feet in the market. Thank you for reading!?????????????????