Wish your parents had bought you Apple stocks when you were young? A EUR 10,000 investment at the company’s first public offering in 1980 is now worth an eye-watering EUR 4,422,250 …
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:
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. This way, you avoid being over-exposed to downturns in individual companies or particular industries (remember the Dot Com Bubble?).
If you have a well-diversified portfolio, your overall investment will remain stable even if some of those companies underperform. On the other hand, if you invest in only one or a handful of companies, you take on a lot of unnecessary risks.
The same applies to the period of your investment. An investment in the stock market only makes sense if it is planned long term and if the invested money is not needed in the near future. This is the safest way to survive financial crises, stock lows and come up on top with a stable investment at the end.
With that in mind, what’s the best way to approach the stock market for kids?
Let’s take a look …
Stock investing for children
Young investors feel more engaged when they invest. In the table below, we have included a variety of publicly-traded companies that many children know and love – or that simply impact the world in the interest of children. And by the way, some of these companies are from Germany.
This is just a small sample of the companies which Yova impact investors can invest in for their children. In the last section of this article, you will find more information on creating a free, personalised investment strategy.
Generally, it’s also better to avoid so-called stranded assets. These are assets that were once highly valued in the past, but have become worthless over time: due to new regulations, changing environmental factors or new preferences. You can find out more about stranded assets in our article How to Make Money & Invest Ethically.
14 Company stocks your kids will love to own
|Tesla||Electric vehicles, energy storage and solar panel manufacturing||Palo Alto, California||Tesla was founded by a group of engineers keen to prove that electric vehicles can be better, quicker and more fun to drive than gasoline cars.
Today, Tesla is at the forefront of electromobility.
|Infineon||Semi-conductor manufacturing||Neubiberg, Germany||Infineon supplies parts for the world’s first “eyes off” driverless car.
It is 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.
In 2017 the company has officially achieved the 100% renewable energy target for its global operations.
|Xylem||Water technology provider||Westchester County, New York||This company 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 all around the world.
|Xcel Energy||Utility company||Minneapolis, Minnesota||This American electricity provider was the first major U.S. company to commit to becoming completely CO2-free.
Xcel broke a world record for wind energy in 2011: 56% of the electricity for its 1 million customers came from wind energy on October 6.
|Renault||Car manufacturer||Boulogne-Billancourt, France||Renault is the market leader for electric cars in Europe.
It is focused on producing affordable electric cars. Around 25% of the electric cars on European streets are made by the company.
|Stryker Corp||Medical devices||Kalamazoo, Michigan||This American company for orthopaedic and surgical implants is relatively unknown outside its industry. Yet, it’s been an innovation leader for decades.
Chances are, you know someone who has one of its hip and knee replacements.
|Ørsted||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.
|Daimler AG||Car manufacturer||Stuttgart, Germany||Daimler is a German carmaker, best known for the Mercedes brand. The company is emerging as a key innovator in electric vehicles. In addition, the company is on track for all its European manufacturing plants to be carbon-neutral by 2022.|
|Nordex SE||Renewable Energy||Rostock, Germany||Nordex designs, sells and manufactures wind turbines. Nordex delivers more than 18 GW of sustainable energy worldwide. It is active in nearly all geographical regions, excluding China.|
|Beyond Meat||Food production||El Segundo, USA||On a mission to create “The Future of Protein”, Beyond Meat makes meat alternatives made from plant-based products. As well as addressing climate change, plant-based meats have the potential to improve human health and improve animal welfare.|
|Lindt & Sprüngli||Chocolate||Kilchberg, Switzerland||Lindt is one of the most successful chocolate producers in the world. The aim of the company is to improve the livelihoods of their farmers in the countries of origin and contribute to an intact environment.|
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. With our online tool, you can select impact topics that are important to you and your family. Your child’s Yova strategy will be fully personalised, professionally diversified and designed for an attractive financial return. You can have a look at this article to understand how to open a Yova for kids account in three easy steps.
As a German customer, you can already join the waitlist for Yova Germany! If you register, you will be notified when the Yova sustainable and profitable investment launches in Germany. We are looking forward to meeting you!
With Yova, you and your children are fully flexible. You can create different investing strategies for each of your children – with different impact themes and exclusion criteria and open Yova sub accounts that are entirely independent of your own investment. Additionally, should a financial emergency arise, the investment can be withdrawn at any time and at no additional costs
If you have any questions or suggestions regarding this topic or Yova in general, we would be happy to hear from you!
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.