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Individual shares as a teenager?

Hello everyone,

I only save the $VWCE (-0,37%) and am considering adding a few individual stocks.

But I had a look at the statistics and of the 500 companies in the S&P 500 50 years ago, only 11.4% are now represented in the S&P.

This makes me wonder whether it is worthwhile for me as a 17 year old to add individual shares as the probabilities definitely speak against it.

My investment horizon is 50+ years but I would of course sell shares earlier if I had to, but I am more of a fan of long-term investments.

What is your opinion on this?

14 Commenti

Tenbagger2024@Tenbagger2024

Difficult question.
And my dear, it's great that you're so engaged with the topic at such a young age.
My compliments.
Investing in a broadly diversified ETF as a core at the beginning was a good decision.
If you dare to invest in individual stocks, I would definitely recommend that you familiarize yourself with the important basics of investing beforehand. Such as
- Valuation of a share
- which key figures are important and what they say
- How do I find exciting companies?
- questions such as what risk do I want to take and how do I recognize risky stocks
- how do I find quality shares with a moat.

There is certainly more to consider here. And as you can see, it's work.
That's why it's only worth it if you enjoy it, but you're also successful in the end so that you stay motivated.

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Finn@yngfinn

@Tenbagger2024 Thank you for your answer. I've already got the basics of equities down, and I've been investing for 2 years.
My main concern was whether it is worth investing in shares over such a long investment horizon, as only 11% is still included in the S&P after 50 years.

What do you think?

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Tenbagger2024@Tenbagger2024

@yngfinn
If you invest in a broadly diversified ETF, you already have it. It contains many large caps from the S&P.
That's why I would look more at companies outside the S&P for individual stocks.
Like mid caps from the Russel, or M DAX

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Finn@yngfinn

@Tenbagger2024 Oh, I had expressed myself a little incorrectly.
The S&P was just a comparison to show that stocks usually don't yield such good returns over a long investment period.
I would choose stocks for my investments regardless of whether they come from the s&p, dax etc.

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Chris@Multibagger

Hello Finn, first of all congratulations on your general decision to invest. In general, I don't think it makes sense to think about how an investment will pay off over 50+ years. So many unpredictable things will happen in your life where you need money, need or want to sell something. So first look for a shorter horizon on which you can base your decision, max. 15-20 years. And unlike many others, I disagree that you can't beat the S&P or the MSCI in the long term. That's an average of 6-8% if things go well. I can do that without going full risk with derivatives. But I admit that to achieve this with individual stocks, you need a bit more knowledge and time to invest in the selection. But there are a few people here like @BamBamInvest, @TomTurboInvest and also @Tenbagger2024, to name just a few, who demonstrate this. I am rather a bad example because my strategy is absolutely not suitable for a young beginner.
So my tip is to follow them here, read their more recent reports, take a look at their portfolios and familiarize yourself with the values. Then look for a few others that are more focused on long-term dividends and take a look at the companies. Then think about how high your long-term safe share in the S&P500 should be and how much you want to invest in individual stocks.
I wish you good luck

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Finn@yngfinn

@Multibagger Thank you for your detailed answer, that is definitely helpful.
I also think that a 50-year investment horizon is a bit exaggerated, but when I buy shares I want to hold them for at least 15-20 years.
I would also limit my holding to 10-20%.
I just want to have a bit more fun investing, for example by trying to beat the All World and build up growing dividends.
The only thing that puts me off is how few stocks manage to survive in the long term.

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Chris@Multibagger

@yngfinn In any case, at your age you should not only invest in ETFs. And it also makes little sense to invest in dividend stocks or distributing ETFs at this age. You are still in the capital accumulation phase for a very long time. And this is better achieved with growth stocks than with dividend stocks.

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Finn@yngfinn

@Multibagger Okay, thank you, I'll have a look at various shares and then look further.
I would also only invest in companies that I have dealt with extensively and the dividends are just a cool side issue.
I wouldn't buy shares specifically for the dividends, but they are included with most shares.
My ETF is also accumulating.

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Klein-Anleger1@Klein-Anleger1

Hi, I'm 16 years old so welcome to the club 😁 I would say that it makes sense to have a base consisting of an MSCI World or something like that. And over time you'll realize that individual stocks are also fun and then you'll certainly include one or two companies...

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Finn@yngfinn

@Klein-Anleger1 Yes, I have already noticed that I find shares more interesting than ETFs, but the problem for me is that I want to invest for the long term and in the long term only 11% of the companies remain in the S&P 500.

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Philip Buß@GoldenShield

The question is what goal you want to pursue with equities. When it comes to returns and performance, I believe that the All World or S&P 500 etc. are unbeatable in the long term.
If you want dividends then you can think about shares (e.g. $KO, $ALV etc)

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Finn@yngfinn

@GoldenShield For me it's more about the fun.
I probably wouldn't beat the All World, but it would still be exciting to try.
And growing dividends would also be very motivating.

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Philip Buß@GoldenShield

@yngfinn I can well understand that. But precisely because you have the most important thing, namely time, on your side, I wouldn't take too much risk with the selection of shares, but rather stick with large and broadly diversified ETFs

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Investor@investingbeginner

Forget $VWCE and just buy/accumulate individual stocks, when they are at a low price

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