Stocks/shares/investing for teenagers

Jayjay08

Wondering if anyone can point me in the right direction for some books.
I have a 15 year old who is very competent with his maths. 

I was looking for some books for him to maybe start him learning how to understand stock markets/investing etc. 

also maybe some mathematical puzzle books or something. 

Thanks. 

El_Torro

Being good at maths does not necessarily make someone good at investing, or even interested in the subject. Has your 15 year old expressed an interest in this?

I don't have any recommendations myself, though there are a few books which keep being mentioned when this question comes up. I'll let others who've actually read them make suggestions. 

bostonerimus

I like Lars Kroiger's approach. I haven't read this book, but it might be worth a look.

https://www.amazon.co.uk/gp/product/1292156120/ref=as_li_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=1292156120&linkCode=as2&tag=sucatlif-21&linkId=518b6ad99b70b5252ae1433ba6dc2817

There are plenty of "O" and "A" level (hope they are still what the exams are called) economics text books that will give a good understanding of stock markets and basic theory and maybe even the counter arguments of Marx, Engles and Keynes and to one of those I'd add "David Copperfield"...Mr. Micawber gave me an early example of the importance of personal financial management. I also found Thomas Hardy novels to have strong socio-economic themes that I found interesting as a teenager.

You might want to point them to Adam Smith and Karl Marx as well if they show interest.

For anyone interested in maths Youtube has lots of content the "Numberphile" channel is excellent.

grumiofoundation

Jayjay08 said:

Wondering if anyone can point me in the right direction for some books.
I have a 15 year old who is very competent with his maths. 

I was looking for some books for him to maybe start him learning how to understand stock markets/investing etc. 

also maybe some mathematical puzzle books or something. 

Thanks. 

Is he interested in learning about investing?

Will be actually investing money? If so his, or yours?

As said above mathematical ability does not necessarily translate into being good at investing.

If the aim is to improve mathematical ability then learning about the stock market will not be a full solution (could be useful for deepening understanding percentages, compound interest, averages and graphs).
The potential drawback to this is the non-mathematical nature of investing. I.e. returns not guaranteed! 

Could point towards index funds as a place to research and can examine the % of each company in various indices/all-world index. Can use as a question to examine the impact on return of a 20% increase in one of the top holding versus a smaller holding. 

In terms of books/resources for more general maths there are a lot of resources online or maybe try the school/local library. For example simply looking at A-level text books, for a high achieving GCSE student. 

Albermarle

Being good at maths does not necessarily make someone good at investing,

Agreed , but I think some good numeracy skills are an advantage in anything connected  with money matters. If you are the sort of person who get confused with percentages, averages, probabilities etc then it will be more of a struggle understanding investments, your tax bill, or even your gas bill !

onomatopoeia99

bostonerimus said:

There are plenty of "O" and "A" level (hope they are still what the exams are called) economics text books 

"O" levels were replaced by GCSEs in the UK a couple of years after I took mine in 1985, so you're almost 35 years behind the times there!  

Hexane

Jayjay08 said:

Wondering if anyone can point me in the right direction for some books.
I have a 15 year old who is very competent with his maths. 

I was looking for some books for him to maybe start him learning how to understand stock markets/investing etc. 

also maybe some mathematical puzzle books or something. 

Thanks. 

At that age you could put some money aside for him in a tax-efficient investment wrapper of some sort and then also let him decide (within reason) what it (or some of it) should be invested in. I had a few hundred pounds worth of shares invested in my own name, quite a few years younger than that. I didn't do particularly well, and it didn't teach me much regarding stock markets other than the importance of patience, caution, and understanding what a P/E ratio was. (And that bull markets don't last forever.)

His deciding what to invest in, or what to read or watch, could as well start on this sub-forum as anywhere else. Questions like which books, which youtube videos, and "should I just buy shares in companies I like the sound of or is there a better way?" come up often.

tebbins

I was also very good at maths (still am I suppose) and at that age I fell for a binary options trading scam.

I think something like:

The Little Book of Common Sense Investing
The Battle for the Soul of Capitalism

By Jack Bogle would serve to implant some good sense before he goes off thinking maths = investment ability

I also found George Orwell's Road to Wigan Pier a really interesting way of telling economic history of the UK in the 30s.

For the technical stuff:
Security Analysis by Benjamin Graham

And if he's really interested, see if you can get a second hand copy of:

Garrett's Introduction to Mathematics of Finance
And/or Schaum's Mathematics of Finance

Non-book and more UK focused resources include:
PensionCraft

Lars Kroijer

Monevator.com (search the beginner articles)

And some starter academic resources that deal with some common myths and provide some historical context:

Credit Suisse Global Returns Yearbook (summary edition is free)

Barclays Equity Gilts Study (can always find a free version somewhere)

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.researchaffiliates.com/documents/FAJ-2003-Two-Percent-Dilution.pdf&ved=2ahUKEwju-tPM0eX0AhUTlFwKHWPGDpkQFnoECAQQAQ&usg=AOvVaw3k73yZYUiPErU7pmTxLLQD

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2993933

It's worth saying that being good at maths could also make him a good engineer, scientist/researcher, teacher... There are plenty of good careers where those talents can be applied outside of finance.

MX5huggy

Your 15 year old will have a Child Trust Fund that he takes control of when he’s 16. I’m sure there’s lots of learning opportunities in that. 

steampowered

I'm not sure why some of the other posters on here are so negative about a young person learning about investing. Someone who understands the basics of investing has infinitely better life chances than someone who doesn't.

Going a little bit off the wall here, but my book recommendation would be "The Big Short". It isn't going to teach your son how to construct a share portfolio, but it does give an insight into how the city operates and covers an important part of recent financial history - while indeed illustrating how investors think! It is an interesting read. 

Or indeed any of Michael Lewis' books.

If you do want something a bit more serious, then "The Intelligent Investor" by Benjamin Graham is one of the classics. 

MaxiRobriguez

If you want to encourage him to learn about investing then in my view the best way to do it is to give him some money to go and play the game for real. 

But you'll want to encourage good habits too, so would need to find some rules about not investing in racy-quick profit potential like Bitcoin.