A Guide to Stock Selection For You and Your Child
Kid Picks: A Stock Selection How To
Updated March 25, 2023
Can introducing your child to investing be as easy as A-B-C?! In just five minutes a month, you can give your future investor a primer on stock selection. Follow our Kid’s Pick Guide to find out how.
3 Investment Guidance Tips For You and Your Child
1. Pick a Company to Follow
With your child, brainstorm a company that captures his or her attention. If your super sports fan loves Under Armour, your tiny tech geek is thrilled by Tesla or your pretty princess digs Disney, go with it. Pick just one company to follow that is meaningful and interesting to your budding investor.
2. Explain How To Invest In that Company
Research the stock ticker symbol. Once you and your kiddo have identified a company to track, explain that any investor, big or small, can buy a tiny portion of that company when they purchase a stock. Each stock has its own ticker symbol, or unique series of four or fewer letters that represent the stock. (For example, Under Armour’s ticker symbol is UAA, Tesla’s is TSLA and Disney’s is DIS.)
3. Follow The Stock Price… and discuss it with your child
Visit Yahoo! Finance to take a look at how the stock price has gone up or down over the past five years (remember, investors should be in it for the long haul!). Ask your child to tell you what they observe about the stock trends. Has it mostly gone up? Has the stock had any major dips? Make a calendar reminder to check in with your child on the first day of every month to see how his or her stock pick has fluctuated.
The Takeaway
By selecting just one company to follow over the course of a few months or more, parents can give kids a bite-sized introduction to investing in the stock market. If parents follow the lead of their mini-Buffett-in-the-making, their kiddo will be much more invested (pun most definitely intended 😉) in following along for the ride.
If parents want to take stock investing to the next level, they might even consider gifting a share (or a fraction of a share) of the stock their child has been following for the next special occasion. With real money involved, kids will reap the rewards of even the smallest investment exercise.
Pro Tip: Set a Google Alert for the company your kiddo has selected so you can keep him or her up-to-date when there is major news that may impact the stock price.
Next Up
Consider creating a mock investment portfolio to allow them to practice investing without the risk.
If you could choose one company to invest in, what would it be?