Investing is becoming more and more accessible these days. More young people are gaining an interest in the stock market, which can only mean good news for the future of the economy. But, you should be mature enough to handle gains and losses when you start investing, so it’s not something just anyone at any age should do.In this post, we’re going to take a look at how old you should be to start investing in stocks. Whether you’re looking to build your portfolio for the future or you’re looking for a get-rich-quick plan, you need to know what to expect. Read on and we’ll help you understand what your first moves should be.
How Old Do You Have to Be To Invest In Stocks?
Anyone at any age can technically invest in the stock market, but if you want to do it all by yourself, then you need to be at least 18. Minors, meaning everyone else, can only open custodial accounts. These are accounts that are maintained by a guardian until the stockholder reaches legal trading age.
There are two basic types of custodial accounts: Uniform Transfer to Minor Act (UTMA) accounts and Uniform Gifts to Minors Act (UGMA) accounts. Although they’re very similar in how they operate, the main difference between them is that the UTMA allows for more assets to be donated than the UGMA, which allows only financial products like cash, stocks, and bonds. A guardian could theoretically donate a vehicle or the deed to a home to a UTMA.
The bottom line here is that, yes, you can invest as a minor, but you’ll need to do it with the help of a parent or guardian and a stockbroker.
Stock Trading for Youngsters
The best thing you can do as a young investor is to diversify your portfolio. Combine stocks, mutual funds, and EFTs instead of just shooting for stocks, which can end up being pretty risky if you don’t know what you’re doing. That said, individual stocks present the greatest opportunity for financial gain simply because they can outpace a broad selection of stocks that you hold across the board.
Choosing growth stocks focus on capital appreciation, while dividend-yielding stocks involve a percentage payment to investors of the company’s profits. Both are good options, but dividend-yielding stocks can be extremely valuable over longer periods of time. Both are still somewhat risky, since you’ll be riding the wave of a company’s success or failure.
At the end of the day, you should probably have some guidance with your stock trading. With monexsecurities.com.au to help you, you can trade stocks with all of the information and guidance that a new stock investor needs.
Build Your Wealth Through Investing
You don’t need to ask the question, “how old do you have to be to invest in stocks?”. It’s a good thing to get involved in stock trading from a young age. The more savvy you are as a young person, the more you’ll understand when you’re older and there’s real money at play.
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