Any thoughts, cautions, on a 15 yo having a trading account?

[rfdrfd]

Why not open him up a "play" account first and see how he does? Save that $1500 and give that to him as cash later.

http://www.cboe.com/tradtool/virtualtrade.aspx


Unless he really knows how to trade and have an education on it, I doubt he will be successful consistently. He may win every now and then, but it will be luck. Given time and constant trading, he will give it all back.

[hagbard]

Well, its been a year. His two investments are up 14% which is better than what I've been getting or my wife. My wife was so impressed she put in another two grand of her own. We still haven't determined who's money it is yet. LOL!

[jedi1648]

With due respect to your 15 yr old son, it is just pure beginner's luck if he picked the stock/mutual fund himself because I dont imagine he can read and understand financial reports, financial statements, and financial ratios like earnings per share and return on equity. The stock market index, particularly the american index if he happened to pick an american index fund that accepts $1000 minimum as investment, has been up since June 2012, and has gone up a lot in the last 3 weeks.

You asked who's money is it? It is your wife's money for tax purposes if she gave him the $1500 earlier, because that is what the attribution rules of the cdn tax act says, and she needs to report the taxble capital gain into her tax return when the investment is sold. Then again, as you son "made" the money, he should have some if not all of the gain into his savings account to make him happy.

[wowser]

Yes, that is a ridiculous concept.

one of my favourite book

[input]

I'm going to be the bad guy here and say this: let the kid work for his money.

He'll be sixteen soon, good enough for his first job. Sure, you could just hand a kid $1500 to play the stock market but I don't think he'll understand the value of what he's doing. If he had a job and earned that $1500, I think he'll appreciate it more to him that his money is now working for him and not just the other way around.

That's just my two cents.

[hagbard]

Remember, he was 15 LAST year, he's 16 now (almost 17). More than half of his investments are in Argentinian stocks. I figured he was going to lose all of the investment, he's done well.

[wowser]

Remember, he was 15 LAST year, he's 16 now (almost 17). More than half of his investments are in Argentinian stocks. I figured he was going to lose all of the investment, he's done well.

what exactly did he buy that is Argentinian if you dont mind me asking

[jedi1648]

You must have anxious moments for many months last years, because of the 14% gain with more than half of your 16 yr old son's investments in argentina stocks that he picked early last year, the argentina index (merval) has gone up 17% for the past 3 weeks, which happens to be the largest index increase of all the world stock exchanges. For the last 52 weeks, the argentina index went up only 17.9%.

[hagbard]

what exactly did he buy that is Argentinian if you dont mind me asking

It was a bank, don't know which one. Its this one (NYSE:BBVA). His other was Smith & Wesson. He's now bought another Argentinian stock, in a gas company, and a 3D printer company (Alot).

[cjottawa]

Well, its been a year. His two investments are up 14% which is better than what I've been getting or my wife. My wife was so impressed she put in another two grand of her own. We still haven't determined who's money it is yet. LOL!

The S&P500 was up about 15% last year and an investment in an S&P500 index fund (like e-series TDB902) would have been far less risky than an individual stock.

Does his 14% also account for trading commissions?

Buy your son a copy of "Millionaire Teacher" or, if it's really a whiz, "The Four Pillars of Investing."

[hagbard]

The S&P500 was up about 15% last year and an investment in an S&P500 index fund (like e-series TDB902) would have been far less risky than an individual stock.

Does his 14% also account for trading commissions?

Buy your son a copy of "Millionaire Teacher" or, if it's really a whiz, "The Four Pillars of Investing."

Its up 14% AFTER all expenses.

[wowser]

It was a bank, don't know which one. Its this one (NYSE:BBVA). His other was Smith & Wesson. He's now bought another Argentinian stock, in a gas company, and a 3D printer company (Alot).

BBVA is a spanish bank don't let the full name deceive you. Do you know the name of the gas company, is it petrobras argentina?

[hagbard]

BBVA is a spanish bank don't let the full name deceive you. Do you know the name of the gas company, is it petrobras argentina?

Yes, my wife told me it wasn't really an Argentinian bank...don't have a clue about the gas company...it didn't involve any of my money so I didn't care.

[ianmills]

Some great advice here. If this was my kid I would have half the money put in passive investments that are automatically rebalanced annually (a la couch potato). That will be the perfect benchmark and a great learning experience for him.

Just as an aside I invested in 2 funds last year. The annualized interest for the first was 23%. The second was 9%.

23% is pretty good, right? Both funds are actually the exact same (one is TFSA and the other is not). The only reason the one got 23% is because the timing was lucky. It will go down to the market average over time. Most likely your son's will too.

[cjottawa]

Its up 14% AFTER all expenses.

Setting that aside, buying individual stocks is significantly more risky than owning an index fund.

Your son took a huge amount of risk for a return that was about that of the market.

Over the long run, he will likely lose money compared to the index.