Being a teenager is a great time – you’re young enough to think you know everything and have the time to apply those ideas to whatever path you want in life. When looking for investment advice, adults like to tell you about saving for retirement.
But a 401k and social security are far from your only worries as a teenager. Plus with time on your side you can afford to take on more risk than a person near retirement. The question then is what are the best stocks for teenagers to invest in?
The answer is always easy enough. You should invest in what you know. Of course, that’s easier said than done, so we’ve made it easy for you here.
We’ll walk you through how to understand the stock market and figure out how to truly invest in your passion. Some people earn their shares of a company by working for 20 years, but anybody can buy into the companies of your dreams. Let’s talk about it, starting with a valuable life lesson.
Nobody Likes to Get Rich Slow
When you’re young and have time on your side, it’s hard to think about the future. However, you’ve likely heard older people lamenting how they didn’t do enough to save when they were younger.
Saving money is hard for anybody, especially in a year when new video game consoles are coming out and everybody wants your money. If you want to spend money, you need to make it though, and the stock market is a way to make other companies work for your money.
These major companies already have everything set up – you’re simply betting on whether or not you believe they can make a profit. Just because a brand exists now doesn’t mean it’s guaranteed to stay that way. Surely, you’ve had a favorite product or food be discontinued by this point in your life. The reality is that it wasn’t making enough money.
It bears repeating that it’s generally best to invest in what you know. If you spend your time watching streaming services, listening to music, and playing video games, you have a good eye on the industry. You know what’s trending and have a lot of inside information your parents likely don’t. This is where you should focus your efforts, and here are four companies to get you started in your research.
Activision Call Of Duty Is Big Business
Activision Blizzard, Inc. (NASDAQ:ATVI) is killing the game (so to speak) in the aftermath of the coronavirus. The shift to homeschooling and virtual work meant people also started playing a lot of video games. Its Call of Duty and Warcraft franchises alone are droolworthy loot for any teenage investor to hold, and it doesn’t matter to this developer which console wins the holiday console wars.
The company’s 2016 acquisition of King Digital Entertainment widened its appeal for casual gamers (Candy Crush, anyone?), and it saved millions not having to hold massive (and expensive) live events during the global coronavirus pandemic shutdown. Whereas Disney struggled with its theme park closures, Activision thrived, leading to big gains for investors.
Like Microsoft (MSFT), Nintendo, and Sony (SNE), Activision gains subscription revenue, along with offering in-app purchases to drive revenue. This gives it an easy digital distribution model in the face of brick-and-mortar retail struggles.
It’s continuing its push into mobile games with its popular franchises, and this company has long-lasting staying power with a proven track record of value growth.
Netflix Has Apple & Disney Muscling In
Netflix Inc (NASDAQ:NFLX) took on the traditional Hollywood studio system the same way Activision stood its ground through generations of video games.
It evolved from a DVD-by-mail service (which, believe it or not, still has two million monthly subscribers) into a streaming service and studio of its own.
The company gained notoriety for poaching some of Hollywood’s biggest names (think Adam Sandler) to bypass the old way.
When the world stayed at home during the coronavirus, they did so by watching streaming services like Netflix. This helped it earn massive gains while other studios struggled.
Does Amazon Have Google In Its Sights?
Amazon.com, Inc. (NASDAQ:AMZN) is a juggernaut at this point. What started as an online bookstore soon became the world’s most efficient supply chain.
Not only does it deliver any product you want, but it offers its own white-label version and can get it insider your home within a day or two of you asking for it out loud.
It also owns both the Alexa smart assistant and Alexa web rankings site. The company is making moves to muscle in on Google’s internet search dominance.
This is being made easier with the Internet of Things, where smart devices make it easier for us to search directly. Amazon is a massive marketplace and someone in your friends or family is probably going to work there one day.
Spotify Has Over 320 Million Users
If Amazon’s too rich for your blood, Spotify Technology SA (NYSE:SPOT) is a successful music company for a reason. Its c-suite full of music industry veterans expertly navigated a tough industry to create the most popular audio streaming service in the world, with 320 million total users.
Besides music, you can share playlists, socialize, and listen to podcasts. Joe Rogan (arguably the most successful podcaster on the planet) signed an exclusive Spotify deal worth $100 million in May 2020.
While that deal led to some internal friction, it’ll overall raise the platform’s visibility. It’s a modern-day version of when Howard Stern went to SiriusXM (SIRI). But while you probably never subscribed to satellite radio, you’ve used Spotify to listen to music and/or podcasts.
And that’s the final word I can give you, which I already said several times in this article. The most important investment advice you can get is to invest in what you know. If you use a service or product, learn about the business behind it.
If you truly believe in it, invest and become a shareholder. Doing that now will provide returns in either money or valuable life lessons for the future. You won’t know if you’re truly right until you put your money where your mouth is.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.