Most anyone can invest in the stock market, but not all individuals can make the purchases on their own behalf, nor do they want to. In the United States, investors must provide a Social Security number and other personal identifying information in order to purchase stock. In addition, citizenship and age restrictions apply in different ways to purchases.
For people outside the United States who want to invest in the U.S. markets, alternatives are available. Buy through a brokerage or investment company that allows you access to the stock market. Each will have its own set of rules about who is eligible and the jurisdictional requirements. If you live within the U.S. and do not have a valid Social Security number many U.S.-based brokerages will not open an account for you. However, some larger brokerages within the country have foreign offices that will establish an account for you.
You can own stock in the U.S. at any age if you follow the rules. For example, small children can invest in the stock market, provided there is someone of legal age to handle the financial transactions for them. A brokerage generally requires that an adult, age 18 or over set up the account. Custodial accounts are those managed by an adult for a minor child or some other beneficiary. The brokerage may require you to adhere to regulations requiring that the investments be set up as irrevocable gifts, meaning the minor must reap the benefits.
Many large-cap U.S. companies offer services for investors to purchase shares of stock direct. If you have Internet access and can visit the company Web site, you can find information on how to be directed to the transfer agent for the company. You may be asked to enroll online to purchase stock directly and you will need to provide a valid Social Security number and other personal identifying information.
Young investors who are not market-savvy can hire the assistance of a broker to invest in the stock market. In the United States, brokerages will require a minimum deposit to open an account and will require that the account holder be of legal age, usually 18. State laws set the minimum age at which a person can legally own stock. This varies from state to state but is either 18 or 21 depending on the jurisdiction.
Mutual Funds and ETFs
Just as with direct stock purchases, mutual funds and exchange-traded funds are a means of investing in the stock market. These too can be purchased for minors and others who are not capable or eligible to arrange investment purchases themselves.
Vicki A Benge began writing professionally in 1984 as a newspaper reporter. A small-business owner since 1999, Benge has worked as a licensed insurance agent and has more than 20 years experience in income tax preparation for businesses and individuals. Her business and finance articles can be found on the websites of "The Arizona Republic," "Houston Chronicle," The Motley Fool, "San Francisco Chronicle," and Zacks, among others.