Best stocks for teens to invest in

Teens 13–17 · Explainer · Updated October 1, 2026 · LearnLife Editorial

What Are Stocks and How Do They Work?

Stocks are pieces of ownership in a company. When you buy a stock, you buy a small part of that company, called a share. If the company grows and earns money, your stock might increase in value, and sometimes the company pays dividends, which are small earnings shared with stockholders. But if the company struggles, the stock price can fall, and you could lose money.

For example, imagine you buy 10 shares of a popular sneaker company at $20 each, spending $200. If the company releases a new shoe and the stock rises to $30 per share, your investment’s value increases to $300. If you decide to sell your shares at this price, you make a $100 profit. On the other hand, if the company has bad news and the stock falls to $15, your investment’s value drops to $150. This example shows how investing involves both opportunity and risk.

Understanding stocks means knowing that prices change every day based on how people feel about the company’s future. Investors watch news, earnings reports, and product launches to guess if a stock will go up or down. Starting with a few shares in companies you know can make learning about stock investing easier and more interesting.

Why Should Teens Consider Investing in Stocks?

Investing as a teen offers a unique chance to build good financial habits early. When you start young, your money has more time to grow through compound growth — that’s when your earnings start to earn money too. Even small investments can grow significantly over many years.

For instance, imagine you invest $100 every year starting at age 15, and your investments grow an average of 7% annually. By the time you turn 30, your total savings could be several times what you put in, thanks to compound growth. Starting early also helps you understand money management, patience, and how the economy works.

Investing helps teens become more aware of how companies operate and what affects their value. It encourages research and critical thinking, useful skills beyond money. It also makes teens less likely to fear financial decisions as adults and more likely to save and plan for their future.

What Are Good Stocks for Teens to Invest In?

The best stocks for teens are often shares of companies they recognize and use regularly. Here are some typical categories and examples:

• Technology companies: Think of makers of smartphones, video games, or social media platforms. For example, companies that create popular apps or devices teens use daily.
• Entertainment companies: Streaming services, movie studios, or music companies that provide the content teens enjoy.
• Consumer brands: Clothing, snack foods, or shoe brands teens buy often.
• Dividend-paying companies: Firms that regularly pay shareholders some profits, teaching about earning income from investments.

Choosing stocks from these groups helps teens connect with their investments and understand how those businesses make money. For example, if you love a brand’s products, you might follow the company’s news and performance more closely, which is good for learning.

It’s also smart to pick companies with a history of steady growth or strong customer loyalty, as these tend to be less risky. Avoid companies that seem too new or unstable unless you are willing to take bigger risks.

What Are Some Related Terms Teens Should Know?

Understanding some investing terms clearly helps avoid confusion:

• Stock trading: Buying and selling stocks often, sometimes daily, trying to profit from quick price changes. This is risky and different from long-term investing.
• Brokerage account: An account you open with a company that lets you buy and sell stocks. Teens under 18 usually need a parent or guardian to open a custodial account for them.
• Dividends: Payments companies sometimes give to shareholders as part of their profits.
• Portfolio: The collection of all your stocks and investments.
• Diversification: Spreading your money across different stocks or types of investments to reduce risk.
• Risk: The chance your investment value will go down instead of up.
• Market index: A group of stocks tracked together, like the S&P 500, showing how a section of the market is doing.

Knowing these terms helps teens understand what happens when they invest and what choices they’re making. For example, diversification means not putting all your money into one company, so if one stock drops, it won’t hurt your overall investment as much.

How Can Teens Start Investing in Stocks?

Most teens under 18 can’t open brokerage accounts alone but can start investing with a custodial account set up by a parent or guardian. Here’s how to begin step-by-step:

1. Educate Yourself: Spend time learning about stocks, how the market works, and basic investment concepts. Use free resources, apps, and articles like How to start investing for teens.
2. Discuss With a Parent or Guardian: Talk about your interest in investing and ask for help setting up a custodial brokerage account.
3. Choose a Brokerage: Look for platforms with no or low fees, easy-to-use apps, and educational tools. Many brokerages now offer teen-friendly options.
4. Fund the Account: Deposit money you can afford to invest. Start small, even with $10 or $20.
5. Pick Stocks: Choose companies you know and have researched. Start with one or two stocks to keep it simple.
6. Place Your Order: Use the brokerage app or website to buy shares. You can buy whole shares or sometimes fractional shares (parts of one share).
7. Track Your Investments: Review your stocks regularly but avoid checking too often. Keep learning and be patient.

Here’s an example of wording you could use to ask a parent for help: “I’m interested in learning how to invest money by buying stocks. Could we open a custodial account together so I can start with small amounts and learn?”

What Should Teens Avoid When Investing?

To build good habits and protect their money, teens should avoid common pitfalls:

• Avoid frequent trading: Buying and selling stocks quickly based on tips or emotions can cause losses.
• Don’t invest money you need soon: Stocks are best for money you can leave invested for years.
• Beware of high fees: Some brokers charge fees that reduce your earnings over time.
• Don’t follow rumors or ‘hot tips’ blindly: Always research before investing.
• Avoid confusing investing with gambling: Stocks are long-term investments, not bets.
• Don’t put all money in one stock: Diversify to reduce risk.

For example, if you hear a friend say a stock will “go to the moon,” don’t rush to buy it without learning about the company. Instead, check the company’s products, financial health, and how it makes money.

What Comes After Choosing Stocks?

Investing isn’t just buying stocks once—it’s about ongoing learning and care. After you pick stocks, keep these steps in mind:

• Review your portfolio periodically: Check your investments every few months to understand how they’re performing.
• Keep adding money regularly: Even small amounts invested over time can grow significantly.
• Learn about diversification: Try to spread your investments across different industries or types of assets.
• Consider index funds: These funds hold many stocks together, reducing risk and simplifying investing.
• Stay patient: The stock market goes up and down. Avoid panic selling during drops.
• Keep learning: Read articles, watch videos, and ask questions about investing.

For example, if you started with technology stocks, consider adding some consumer goods stocks later to diversify. Or, if you find individual stock picking too challenging, explore index funds as a safer option.

How Can Teens Learn More About Investing?

To keep improving, teens can:

• Read articles like Investing tips and tricks for teens and Stocks for teens: a parent guide for detailed advice.
• Use apps or websites with simulated stock trading to practice without risk.
• Join school clubs or online groups focused on investing.
• Ask parents, teachers, or mentors for guidance.
• Stay updated on financial news relevant to stocks you own.

Learning investing gradually builds confidence and understanding. The goal is to develop skills that support lifelong good money habits.

Frequently asked questions

Can teens buy stocks without a parent or guardian?

Teens under 18 generally cannot open brokerage accounts on their own. They need a custodial account managed by a parent or guardian until they reach legal age to trade independently.

What is a custodial brokerage account?

It’s an account where an adult manages investments for a minor. The child owns the assets, but the adult controls transactions until the child becomes an adult.

Are there risks in investing as a teen?

Yes. Stocks can lose value, and investing involves risk. Teens should only invest money they won’t need soon and focus on learning rather than quick profits.

What’s better for teens: individual stocks or index funds?

Index funds spread money across many stocks, making them safer. Individual stocks can be riskier but more exciting. A mix helps teens learn both approaches.

How much money do teens need to start investing?

Many brokerages allow starting with small amounts, sometimes $10 or less. Starting small helps teens learn without risking too much money.

Can teens trade stocks frequently?

Frequent trading is risky and generally not recommended for teens. Long-term investing usually leads to better results and less stress.