How to Invest in the Stock Market When You’re Young

Although young people are very interested in investing in cryptocurrencies, notably Bitcoin, they do not neglect stocks and continue to invest in the stock market. Stock markets have enjoyed a genuine resurgence among young investors since Covid. It must be said that when you look at the unparalleled performance of equity markets over the very long term, it would be a mistake to deprive yourself of this income source on the pretext that you have little money to devote to it.

We can then pose the legitimate question: how to invest your money when you are young? How to invest in the stock market as a youth? Discover our 5 tips that will allow you to invest in the stock market when you are young, even if you have a tight budget.

How to invest in the Stock Market when you are young? Our step-by-step guide

How to invest your money when you are young?

First, know that investing in the Stock Market is particularly rewarding over the long term, which is advantageous when you are young and have a long investment horizon. Moreover, given market volatility, it is more sensible to invest with a horizon of 10, 20, or even 30 or 40 years. Investing in the Stock Market should therefore be considered long term, and for that reason, it is better to start early. You can start investing in the Stock Market as soon as possible, for example as soon as you begin earning your first salaries.

Be careful, however, as we noted earlier, your stock market investments should be contemplated with a horizon of one or several decades, and you will therefore benefit from building an emergency fund equal to 3–6 months of salary to cover unforeseen expenses before investing in the Stock Market.

You could place your precautionary savings (e.g., €7,000 or €8,000) in a Livret A, a bank savings account, an LDDS or, for the youngest who are eligible, in a Jeune Savings Book. These secure placements keep liquidity readily available to cope with everyday unforeseen events, whether it is an urgent repair, a medical expense, or any other event requiring quick mobilization of your savings. It would not be wise to have to hurriedly sell some losing stocks to pay the locksmith’s bill.

You can absolutely invest in the Stock Market as a youth. In fact, it is possible to invest in the Stock Market when young even with a very small budget, which is common among young workers. You will of course adjust this amount to your income.

According to INSEE, young people under 30 save on average €137 per month, i.e. €1,638 per year. This rises to €195 per month (i.e. €2,345 per year) for those aged 30 to 39.

Even if not all of your savings will be directed toward the Stock Market (you will need to set aside capital-protected investments to fund all your short-term projects), it would still be wise to invest €100 per month in the Stock Market, or a little more or less depending on your income and charges.

Investing in the Stock Market when you are young is far from impossible. You can even invest with €10 per month. You will need to set an amount that aligns with your income and that you can sustain over the long term in your budget. The essential thing is to develop this habit as early as possible and to stick to it.

How to learn to invest in the Stock Market when you are young?

Once you have decided to invest in the Stock Market, you will need to learn the basics of investing in the Stock Market, including the difference between the various assets, notably stocks and bonds, but also ETFs and mutual funds (OPCVM), the basics of fundamental analysis and stock picking, the process of placing stock orders and money management.

To learn, understand and use all these notions, you can turn to specialized media such as Café de la Bourse, which provides guides and articles to its readers. You can also consider a serious training course offered by an online broker or in person. Webinars are plentiful on the web as well. If you prefer books, there is no shortage of literature on stock market investing, and it is a topic covered in all serious personal finance books.

How to invest in the Stock Market very regularly, even with €10 or €100 per month?

Investing in the Stock Market when you are young allows you to fully benefit from the magic of compounding returns. That is why it is so important to invest regularly, even with small amounts, especially since with fractional shares and ETFs, you can start with €50 or even €10 per month.

By investing in the markets from your twenties with a long horizon of 10, 15, 20, or even 30 or 40 years, the Stock Market offers a highly attractive wealth-creation potential. For example, over the last twenty years, major equity markets have posted solid average annual returns, about 6% per year for the CAC 40, nearly 9% for the MSCI World, over 11% for the S&P 500 and around 15% for the Nasdaq-100.

Of course, past performance is no guarantee of future results and markets can experience periods of high volatility. Nevertheless, by investing regularly over the long term and reinvesting the gains, the investor benefits from a powerful snowball effect that can significantly increase the value of their capital over the years.

Moreover, it is important to note that the longer the horizon for investing in the Stock Market, the lower the risk of capital loss. Thus, if we consider the performance of the S&P 500 over a century (1920–2021):

• the probability of incurring a capital loss is 30% with a 1-year horizon,
• 23% with a 2-year horizon, 14% with a 10-year horizon,
• 5% with a 20-year horizon, and 0% with a 50-year horizon.

(source: Ostrum & Robert J. Shiller)

And this is only for a one-time investment! If you invest regularly in the markets for decades, the risk is even lower. Thus, you are sure not to enter the markets at a peak. Additionally, by always investing the same amount, mechanically (this is called DCA or Dollar Cost Averaging) you will buy fewer shares when prices are high and more when they are cheaper.

Therefore, it would be wise to set up an investment plan at the beginning of the month when you still have liquidity in your current account.

How to choose the investment vehicle for investing in the Stock Market when you are young?

What to invest in when you’re young? You can choose to direct your programmed investments toward tax wrappers or account types that will allow you to invest in the Stock Market: a PEA, a compte-titres, a life insurance policy (assurance-vie), or a PER.

You should choose your vehicle based on your goals, whether you want to multiply or not the wrappers, whether you want to subscribe to a broker online, and the markets in which you want to invest.

Thus, if you want to hold a single wrapper, it would be sensible to invest in the unit-linked units of your life insurance, which can also be used to invest in the bond market and in real estate via SCPI or SCI, while the euros fund of your life insurance will provide a capital-guaranteed placement.

Comment from Clémence:

Note that there is no minimum age to hold life insurance. Indeed, your parents can open a life insurance in your name from birth. And you can fund this life insurance throughout your life: as a child, then a teenager, then a young professional, and so on.

If you want to invest in shares of companies whose headquarters are located in the European Union and on some major global stock indices through trackers, it is recommended to open a PEA which will allow you to benefit from significant tax advantages (exemption from capital gains tax after 5 years of holding the plan).

Comment from Clémence:

Note that young people aged 18 to 25 who are still attached to their parents’ tax household can open a Young PEA, with a ceiling of €20,000, enough to take their first steps in the Stock Market! It will then be converted into a standard PEA at 26.

If you insist on investing in direct stocks of US companies or outside the EU, you will necessarily need to open a compte-titres, available from 18 years old.

If you want to invest with the aim of financing your retirement and benefiting from tax advantages from your very first contributions, the PER seems well suited. Note that since January 1, 2024, PERs held by minors can no longer receive voluntary contributions. Already opened PERs remain blocked until majority.

Of course, it is entirely possible to multiply the envelopes according to your strategies, your projects to fund, and to take advantage of the strengths of each.

Clémence’s advice:

For the PEA or the life insurance which allow you to enjoy tax advantages linked to the duration of holding the plan or contract, open an envelope as soon as possible, even with only a few tens of euros, to establish a date and thus benefit as quickly as possible from the exemptions and tax reductions offered by these supports.

How to invest in the Stock Market at 16 years old?

Among the investments that allow you to invest in the Stock Market, life insurance and the compte-titres can be held in your name before 18 years old. You will not be able to invest in the Stock Market with a PEA before 18. You will have to wait until you reach the age of majority to open a Young PEA.

In the case of the compte-titres, it is possible for a minor to hold one, opened and managed by their legal representative. You can of course be a partner, or even take the initiative in the investment decisions on your CTO.

Same for the life insurance contract which can be opened in your name by your legal representatives and on which you can invest as you wish, with your parents’ consent.

Comparison of the best online brokers to invest in the Stock Market when you are young

Top Stock Brokers	Current Offers	View Offers
	1 Nike share offered with code LAITCAFE and a minimum deposit of €100. Capital at risk*
	Get up to $500 in free assets. Your capital is at risk*
	0 commissions on stocks and ETFs + receive up to 20 free shares upon your deposit. Invest with a free personal manager. See T&Cs. Capital at risk*
	Invest with 0€ commission and 5% interest on your invested cash. Capital at risk*
	3% interest on your uninvested cash + invest from €1 on stocks, ETFs, programmed plans, cryptos and market products. Capital at risk*
	Stocks and ETFs at €1 per trade. Your capital is at risk*
	0.08% on French and US stocks + Saxo Turbos at €0 + Up to 2.66% interest on cash balances. Capital at risk*
	US stocks officially from $1 + assistance with an expert on the platform. Capital at risk*
	From €0.99 per stock order + transfer fees reimbursed and free training. Capital at risk*
	Transfer fees reimbursed 2x + from €0 per stock order with Boursomarkets. Investing carries a risk of loss*

*See conditions on the site.

Which stocks to choose to invest €100 per month in the Stock Market when you are young?

You can then select the securities that will compose your portfolio, relying on fundamental analysis to determine which titles to hold and on technical and chart analysis to determine the best moment to buy them. You will also need to define when to sell, knowing how to take profits when targets are reached, without opting for premature exits that would erode your gains.

Comment from Clémence :

If you want to pick the stocks yourself but as a young person you don’t yet have a lot of means, you can turn to fractional shares. Fractional shares, available with neo-brokers and some online brokers, allow you to buy only a fraction of a share. For example: 1/10, so if a share trades at €100, that means you can position yourself in the stock with only €10. Be careful, because you would need 10 stock orders to buy the whole share, which would blow up brokerage fees, but some brokers offer fractional shares in commission-free investment plans.

You’re overwhelmed by the idea of analyzing the stocks yourself and/or don’t have much time to devote to your investments? You can invest in a few ETFs that simply replicate stock indices, a safe, reliable and inexpensive way to invest in the Stock Market over the long term!

If you really want to try to beat the market without getting involved, you can also turn to actively managed mutual funds (OPCVM) or active ETFs, but be aware that managers are few in number to beat their benchmark and that management fees are much higher than those of index funds and ETFs.

Finally, if you want to avoid doing anything at all, you can also opt for managed accounts and give a management company a mandate that, according to your risk profile, your investment horizon and the market conditions, will manage your portfolio and take all necessary arbitrage decisions.

It is also possible to mix these 3 strategies according to your desires and your level of knowledge of the different markets on which you wish to invest.

We would like to point out that when investing in the Stock Market with a tight budget as a young person, it is especially important not to have the performance of your investments eroded by avoidable fees.

Thus, you should carefully choose your Stock Broker and pay particular attention to brokerage fees. The offerings of neo-brokers with 0 commissions on ETFs and stocks can be particularly advantageous.

Some, such as Scalable Capital, XTB, or Trade Republic, even allow you to invest in the Stock Market via programmed deposits starting from €10 per month with no fees. Be careful not to choose your financial intermediary solely based on tariffs. Rates and fees aren’t everything; you should also pay attention to the available products and markets, as well as the tools and services provided.

The 3 tips of an expert in the Stock Market for a young beginner in the Stock Market

1. Invest as early as possible

The best moment to invest was yesterday, so you should start today. Once you have a precautionary savings, dive into the financial markets. It doesn’t matter if you have €10 or €100 or €500 to invest each month; the essential thing is to dedicate a portion of your income to investing. The amounts will grow on their own as your career progresses, but this is a habit to adopt as soon as you enter working life.

2. Keep a cool head

Watch out for FOMO, the fear of missing out on an opportunity should not be a reason to buy. Likewise, in case of a drop in stock prices, hold your position if the fundamentals have not changed. Have confidence in yourself and above all, give yourself time. Stock market performance is exceptional over the long term, rarely over 1 month or 1 year but rather over a decade or more.

3. Delegate if needed

If you know nothing and don’t want to get involved, you can open life insurance, PER, PEA or compte-titres with managed management and benefit from the expertise of managers who will take into account your investor profile to grow a wealth over time. You can also buy a few ETFs of major global stock indices from a PEA to maximize gains given the tax advantages of this wrapper and let time work in your favor thanks to the magic of compounding interest. Lack of time or knowledge is not an excuse, so go for it!

All of our information is, by nature, generic. It does not take into account your personal situation and does not constitute personalized recommendations aimed at executing transactions and cannot be construed as financial investment advice, nor as any incentive to buy or sell financial instruments. The reader is solely responsible for using the information provided, and Cafedelabourse.com cannot be held liable. The publisher’s liability cannot be engaged in case of error, omission, or ill-timed investment.