These Teenagers Know More About Investing Than You Do

Seventeen-year-old Sophia Castiblanco doesn’t just drive a Tesla . She also owns shares of the company .

Sophia, a high school junior in the Chicago suburbs, invests in stocks such as Tesla, Apple and Amazon.com. When she started making money as a social-media content creator three years ago, her parents encouraged her to put some of her earnings in investments likely to grow over time, rather than parking all her cash in a savings account .

She now has several thousand dollars invested in accounts set up by her father at Charles Schwab, Edward Jones and Robinhood . Last year, she saved up money to buy a new Tesla Model 3, which starts at around $40,000, through a payment plan she is splitting with her parents. On TikTok, Instagram and YouTube, she makes videos teaching her thousands of followers about investing basics.

“I’ve always had a business mindset of wanting to make money, and I’m very OK with taking risk,” Sophia said. “There’s really no minimum age to start.”

Sophia is one of many teenagers jumping into the U.S. stock market. Teens generally can’t open their own brokerage accounts until they turn 18, but adults can set up custodial accounts for minors. The accounts are turned over to the children when they reach legal age.

Custodial accounts for teens at Schwab totalled nearly 200,000 in 2022, up from about 120,000 in 2019, according to the company. They jumped above 300,000 in 2023, thanks in part to Schwab’s integration of TD Ameritrade. Other brokerages, including Vanguard, Fidelity and Morgan Stanley’s E*Trade, also reported a surge in custodial accounts in recent years.

Some teens ask their parents to open accounts—and share the login information—at brokerages such as Robinhood that don’t offer custodial accounts. At smaller financial apps such as Greenlight, teenagers are investing more money than ever before. They invested $20 million in 2023 using the Greenlight app, up from around $10 million in 2021.

A Fidelity study on teens and money recently estimated that about a quarter of teenagers in the U.S. have started investing, based on an online survey of 2,081 respondents ages 13 to 17. Trades placed using Fidelity’s Youth app, an account opened by parents but owned by teens, jumped in the fourth quarter.

Many teenagers opened up their accounts during winter break while off from school, said Kelly Lannan, a senior vice president at Fidelity.

The boom in teen trading is part of a wider rush to financial markets among Americans since the start of the Covid-19 pandemic. Stocks rocketed higher , drawing hordes of newbie investors trying to profit from the big gains.

Many of those new investors have since ditched the meme stocks that soared during that era but have remained invested, sending the share of Americans who own stocks to an all-time high.

Stocks are back at record levels, with the Dow Jones Industrial Average recently topping 38000 and the S&P 500 eclipsing 5000 for the first time. Since the start of 2020, when an unprecedented trading boom among rookie investors kicked off, the S&P 500 has soared around 55%.

“There’s just more and more awareness that the sooner you start, the better things are,” said James Martielli, head of investment and trading services at Vanguard.

Martielli said he opened custodial accounts for his three children more than a decade ago when they were toddlers. At Vanguard, there has been a jump in custodial IRAs, a type of retirement account.

The biggest advantage is time. Setting aside $10 a week for a child at birth would leave an 18-year-old with a roughly $20,000 nest egg, assuming an 8% annual return, according to the investing app Stash, which offers custodial accounts. Left until the investor turned 70, and assuming annual growth of 8%, that sum would mushroom to about $1 million.

Of course, these returns can be shaped by many factors, including when an investor buys in and how stocks end up doing. The S&P 500 has recorded a 10% annualised total return over the past three decades, according to Dow Jones Market Data through the end of 2023. Buying an S&P 500 index fund at the peak of the dot-com bubble in 2000 would generate an annualised total return of around 7%, while buying at the low of the financial crisis in 2009 would lead to a roughly 16% annualised total return.

Hot tech stocks

Brokerage executives say that technology behemoths that are ubiquitous in the lives of teens are often some of the most widely held shares. At Vanguard, U.S. stock index funds are particularly popular in custodial accounts.

Mahanth Komuravelli, 16, has a small chunk of his roughly $7,000 portfolio in an S&P 500 index fund, while most of his positions are in big companies such as Amazon and Advanced Micro Devices. He is exploring buying some small-cap stocks such as education company Chegg . Mahanth uses a Fidelity Youth Account that his father helped him open. The two often discuss investment ideas.

“Sometimes he asks me for advice,” said Mahanth, a high school junior in Edison, N.J.

Kaida Benes, a 13-year-old from the suburbs of Minneapolis, has been stashing money—earned from household chores such as doing the dishes or cleaning the bathroom—in an investment account on Greenlight that now has about $1,000 in it.

She’s also been drawn to bigger companies and has invested in tech stocks such as Apple, Alphabet and streaming companies Disney and Netflix . At times, she has been on edge about potential losses. She says her mother has helped her stomach the volatility.

“Stocks go up and down. It’s fine, it just happens,” Kaida said she’s learned.

She has been hunting for other opportunities to make money to pour into savings or investments. She recently found a recliner chair at a yard sale and enlisted her parents to help fix it up and flip it for a profit on Facebook marketplace, she and her mother, Renee Benes, said.

“I like having money,” Kaida said.

Renee Benes said she was frustrated that she didn’t learn about investing until a year or two ago, when she was well into her 30s. Benes, who’s an online influencer, wanted her daughter and son to be more financially savvy.

Lessons learned

Many young investors are starting to invest earlier than previous generations did. Almost two-thirds of Gen Z investors said they first started learning about investing in high school or middle school, compared with about 38% of millennials in a 2023 Bank of America survey of affluent individuals. Some are introduced to stocks through family members or teachers, while others have turned to social media.

Felix Peng, a 17-year-old in the Los Angeles area, said he has learned a lot about investing from YouTube and Instagram—but that some social-media stars promote riskier trading strategies that seem more like gambling. He said it is a red flag when influencers try to sell expensive trading courses that promise investors they will make a lot of money quickly.

Still, Felix believes it is beneficial for young people to learn from their mistakes when they have less money to lose. His investments in Apple, Meta Platforms and Alphabet have performed well. But when he bought shares of Teladoc around their peak and watched them tumble, he saw how tough it is to time the market. He has about $1,000 in a custodial account on Stockpile, an investing app geared toward parents and children.

“It’s a great lesson and I’m glad I learned,” Felix said.

Seventeen-year-old Rachael Kim in Orange County, Calif., traded shares of AMC Entertainment Holdings during the meme-stock era and said she made a roughly 300% profit.

“For a little while, I got addicted to that adrenaline,” Rachael said of day trading. “But as I began researching more, I realised it was highly unlikely to continue that aggressive profit.”

Rachael said she started studying investing to help her parents, who are immigrants, prepare for retirement. Now she regularly invests about half of the money she makes—from creating social-media content, working as a cashier and teaching at her church—in index funds tracking the S&P 500 and tech-heavy Nasdaq-100. She has about $10,000 in her custodial Roth IRA at Fidelity.

“Since we’re young, we have the privilege of seeing our investment compound,” Rachael said. “The biggest lesson would be to start early.”

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

These Teenagers Know More About Investing Than You Do

Hot tech stocks

Lessons learned

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.