Wish your parents had to buy you Apple stocks when you were young? 10,000 investment franks at the company’s first public offering in 1980 is now worth an eye-watering 4,422,250 francs …
It might be tempting to try to pick “the next big thing” for your own children, or any other long-term investment. But there’s a big problem here:
Since no one can predict the future of the stock market, trying to pick “winning” stocks is almost always a losing strategy.
In fact, it’s not much more effective than throwing darts with your eyes closed.
When thinking about the best stocks to buy for kids , focus on creating a portfolio that’s diversified across 30 to 40 companies – ranging across different industries, geographies, currencies, and company sizes. These are not over-exposed to down-turns in individual companies or particular industries (remember the Dot Com Bubble?).
If you have a well-diversified portfolio, your overall investment will be okay even if some of those companies underperform. On the other hand, if you invest in a handful of companies, or worse, just one company, you take on a lot of unnecessary risks.
With that in mind, what’s the best way to approach the stock market for kids?
Let’s take a look …
Stock investing for kids
Young investors feel more engaged when they invest. In the table below, we have included publicly-traded companies that offer children to recognize, or those who have an impact.
Yova customers can invest in. In the last section of this document, you will find more information on creating a free, personalized investment strategy.
Importantly, we recommend avoiding stranded assets – this term refers to investing in environmentally friendly practices. We covered the topic of stranded assets in our article Why Ethical Investing Does not Mean Sacrificing returns .
By the way – keep an eye out for our forthcoming knowledge series on Investing for Children. This will provide a detailed overview of tax implications, risk management, growth forecasts and more.
17 Company stocks your kids will love to own
|Tesla||Electric vehicles, energy storage and solar panel manufacturing||Palo Alto, California||Founded by a group of engineers who wanted to make electric vehicles quicker and more than gasoline cars.|
|Pandora||Jewelery manufacturing & retail||Copenhagen, Denmark||Hugely popular among young people, this brand is committed to ethical manufacturing.
Its Thai employees enjoy competitive salaries, double wages for overtime, free meals, insurance, parental leave and more.
|Ferrari||Luxury sports car manufacturing||Maranello, Italy||Develops many innovations that are later introduced to the mainstream market (eg carbon materials).
Heavily promotes workplace diversity, safety and employee well-being.
|Infineon||Semi-conductor manufacturing||Neubiberg, Germany||Supplies parts for the world’s first “eyes off” driverless car.
Breaking new ground to protect the world from cyber attackers in the age of quantum computers.
|Alphabet||Technology & life sciences||Mountain View, California||Founded on the motto of “Don’t Be Evil”, Google’s holding company is the world’s largest corporate buyer of renewable power, reaching 100% renewable energy for its global operations in 2017.|
|Xylem||Water technology provider||Westchester County, New York||Develops technology to purify and transport water (unclean water is one of the leading causes of sickness and death in the developing world).
Xylem’s Essence of Life program helps the world’s poorest people gaining access to clean water.
|Vestas||Renewable energy||Aarhus, Denmark||As the world’s second-largest manufacturer of wind turbines, the company has a mission to reduce the environmental impact of energy.
It implemented strong action upon discovering that turbine production could have negative impacts on the environment.
|Nibe||Heating technology||Markaryd, Sweden||The company helps to reduce emissions and energy consumption by designing and producing ultra-efficient air-conditioners, heaters and heat pumps.
Nibe products can be found in homes, hotels and public buildings around the world.
|Xcel Energy||Utility company||Minneapolis, Minnesota||An American utility company that has one million customers.
It broke the record on October 6, 2011, when 56% of its electricity came from wind.
In the three years leading up to 2016, it grew its wind power generation by 40%, and its solar power generation by 400%.
|Barry Callebaut||Cocoa & chocolate products||Zurich, Switzerland||Considered the “heart and engine” of the chocolate industry, this company sources cocoa for clients including Lindt, Mars and Nestle.
It’s working to eradicate child labour and poverty by 2025, and aims to have a “net positive” impact on the environment by the same year.
|Emmi||Dairy processor||Lucerne, Switzerland||Known mostly for its dairy products on local supermarket shelves, the company has a large multinational operation and employs more than 6,000 people.
In recent years, it acquired several companies including American cheese manufacturer Cowgirl Creamery.
|Renault||Car manufacturer||Boulogne-Billancourt, France||Renault is the market leader for electric cars in Europe.
It is focused on producing affordable electric cars, and now around 25% of the electric cars on European streets are made by the company.
|Hochdorf Group||Dairy processor||Hochdorf, Switzerland||Founded in 1895 as a cooperative to export local milk products, the company now produces milk powder, baby food, sports products and more.
It has plants in Lithuania, Germany, and two Swiss locations.
|Schindler Group||Escalator & elevator Manufacturer||Ebikon, Switzerland||Founded in 1874, Schindler produces, installs, maintains and modernises elevators and escalators in many types of buildings.
The company is present in more than 140 countries and employs more than 58,000 persons worldwide.
|Stryker Corp||Medical devices||Kalamazoo, Michigan||Started in 1946 by an orthopedist doctor, this company is relatively unknown outside of the industry. Yet, it’s been an innovation leader for decades.
Chances are, you know someone who has one of its hip and knee replacements.
|Orsted||Renewable energy||Fredericia, Denmark||This electricity company transformed its business from fossil fuels to renewable energy.
It has a goal to only offer green energy by 2023, which will represent a 96% emission reduction.
|Hilton Worldwide Holdings||Hospitality||McLean, Virginia||This hotel & resorts operator has more than 5,200 properties in 105 countries.
Hilton is acknowledged for its efforts in providing fair conditions for its 160,000 employees globally.
How can I start a stock market investment for my child?
The first step is to get your personalised impact investing strategy – it’s free and non-binding. Using our easy online tool, you pick the sustainable and socially responsible investment themes that are most important to your family, while also considering diversification and risk profile. Your child’s Yova strategy will be completely customised, and designed to deliver market-rate returns.
Get your free impact investing strategy here.
Disclaimer: The past performance of financial markets and instruments is never an indicator of future performance. The statements or information contained in this document do not constitute a recommendation, offer, invitation to buy or sell securities or financial instruments.
Yova AG accepts no liability whatsoever for the reliability and completeness of the information contained in this article. Liability claims against Yova AG are published in this document are excluded. In addition, the statements contained in this document reflect an estimate at the time of publication and are subject to change. References and links to websites of third parties are outside the area of responsibility of Yova AG. Any responsibility for such websites is disclaimed.