The youth and the stock market

Quite a lot of people are joining the stock market at a younger and younger age. While it's important to know about such things eventually, I wonder about the wisdom of joining it at such an early age. Isn't there something else to focus on, like socializing and indulging in pointless but memorable pursuits? I started doing this stock thingy when I'm 26 or 27. I've the bulk of my earlier years doing plenty of pointless but memorable stuff. I remembered playing lots of RPG games, reading extensively on all sorts of topics (except finance) and simply just day dreaming.




Would I exchange all these stuff for an earlier retirement? I doubt so. It's just part of growing up, I suppose. I fear that the younger the youths are joining such financial pursuits, the faster they would lose their youthfulness and idealism. The financial arena is not for idealistic individuals because they would be washed out in no time. Will today's youths be losing their idealism at an earlier age too? Who else could be idealistic if not for the youths?




The youth are greatly limited by the lack of capital. I don't know about them, but when I'm in my early twenties, even if I've the interest in the stock market, I would perhaps have less than 10k in my bank account. And what could I possibly do with 10k in my bank account? Buy s-shares? Buy those pennies and hope that my skills in picking out a gem would ensure that my 10k would multiply? It's not impossible, it's just terribly hard and the odds are against you since without the necessary capital, every shot counts even more so and the tolerance of mistakes are significantly reduced. Or perhaps driven by the lack of buying power, one would be driven to use leverage to enhance the gains (and the losses)?

I think like a kitten, the youth should spend time on playing.

So, what's the point of dabbling in the stock market when one is so severely limited? I believe that without a minimum capital, it is better not to start investing/trading. That minimum should be around the range of 50k. Why 50k? With that amount, a position of 10k can be placed each time, so one would have 5 bullets in total. With 10k, one can buy most of the blue chips, which are a lot safer than pennies, though the gains are not as substantial. With 5 bullets, perhaps 3 would be average, 1 would be spectacular in profits and 1 would be in the loss, so one would come out of it alright. But what happens if you don't have 50k to begin with? Then stop kidding yourself that the positions are for long term investment and stop deluding yourself that the amount of dividends would contribute towards your passive income for attainment of financial freedom. Even if you struck gold, the amount gained would be insignificant.




A lot of youths start to believe in their own investing/trading powers after reading up on a few books by their gurus. That is the problem isn't it? Clouded by youthful optimism and confidence, they march straight into the jaws of a shark, still thinking that they can escape unharmed. I think it takes life experience to sieve out skills from luck, because a skilled person would have the same outcome as a lucky person. It also takes life experience to sieve out the market truths and the myths. Literature cited time in the market is better than timing the market. I'll say it depends on which stock you're holding. The wisdom it takes to determine when an advice is appropriate to a situation will take time to develop. I'm just not sure whether when I'm in my twenties, I would want to learn about such things. I feel that a part of something in me would be lost and gone forever. You can get all cynical and skeptical after being 'tainted' by the market, especially if you've lost a lot of money.




Seriously, I would recommend most youths to simply concentrate on their studies or get a part time job and in the meantime, just read extensively about finances in general and not to focus so much attention on the stock market. There is a time to do everything and once that time has passed, you'll be wondering how your youthhood is like. Would it be full of adventure and memories or would it be that you've made a ROC of 10% but an absolute amount of $1000? What is $1000 to a youth with no proper earning power yet and what is $1000 to a working adult?