Children Investing in the Brazilian Stock Market? “It’s Not Child’s Play”

RIO DE JANEIRO, BRAZIL – Around 13,000 youths up to age 15 invest in the Brazilian stock market. Ten years ago, this number was only 2,000. The increase of children and adolescents on the stock market is a reflection of the general increase of new investors in the market. A decade ago, the stock market did not have 500,000 investors. Currently, there are approximately three million.

The increase in new investors is mainly due to the reduction of the basic interest rate in the country. In 2010, the SELIC stood at ten percent per annum. Currently, it stands at two percent a year. With the consecutive cuts in the basic interest rate, Brazilians have found in variable income an option to have more attractive yields.

The IBOVESPA index rise in recent years has also helped. In 2019, the main B3 index accumulated an increase of 31.58 percent, after rising 15 percent in 2018. In 2017, the rise reached 26.86 percent, while in 2016 it was 38.93 percent. Additionally, learning about how to invest is increasingly accessible. On the Internet, there are a variety of courses, videos, and materials available.

The interest of the young public on the financial market has already made some specific products for this niche emerge. For instance, Inter Bank launched last month a Kids account, which provides access to the bank’s investment platform, enabling investments in modalities such as fixed income (CDB, LCI, and LCA), investment funds, private pensions, variable income, and public offerings.

Bradesco’s “Next” has also launched an account targeting children and adolescents up to 17 years of age. The product was launched in partnership with Disney to promote financial education in a playful way. The 300,000 clients mark is expected to be reached by the end of the year.

EXAME spoke with two youths who began to invest in the stock market during childhood.

Market’s youngest influencer

At the age of 12, Felipe Moleiro talks about investments like a grown-up. Through social media, the boy shares investment tips for those starting in the market. Known as “Kid Investor”, he has 46,000 followers on Instagram and 14,000 on YouTube. His interest for the subject emerged when he was nine years old. “I was always wondering how someone can have so much money to buy mansions and cars. And I found out that the money comes as much by entrepreneurship as by investment.”

Wanting to learn about the topic, Felipe decided to look for information on his own through books and videos on the Internet. Equipped with information, he asked his parents to open an account in a brokerage house. “They were not investing and thought that my request was child’s play.” After much insistence, they authorized it.

But before opening the account, the boy set up a plan to raise capital and have money to invest. He made his money through the sale of used books and candy among his classmates at school. “I decided to sell juices at one of the school events. To be different, I put dry ice in the glass. My mother did the marketing by walking around the school. That day, I raised over R$500.”

With the money in his hands, Felipe made his first investment. He chose real estate funds encouraged by the payment of dividends. It was in March, when the coronavirus pandemic hit, that the boy bought his first shares.

The choice was for Petrobras shares which were selling low. He also invested in Taesa, Metal Leve, Itaúsa, BR Malls, and ETFs. “My portfolio is modest.” If the investments are still small, the dream is big. Felipe plans to be the manager of his own hedge fund.

From skates to the stock market

The desire to get a pair of skates led Carolina Bartunek, 18, to start investing in the stock market. When she was 12, she asked her father for this Christmas gift. The answer she got was that if she were to take that money, invest it, and be a little patient, she would soon be able to buy two pairs of skates. “Two is certainly better than one,” she jokes.

This suggestion came from Florian Bartunek, one of the most renowned managers in the country and Carolina’s father. “That’s how he started to explain what shares were and how we could be partners buying a little piece of a company.”

The second lesson was about how to choose companies to invest in. Carolina chose shares of companies she is familiar with, such as Google, Nike, and Apple. “I bought BDRs from companies that are in my day-to-day life.” As the years went by, while learning how to invest and set up a portfolio, Carolina set up a group at school to discuss and exchange information with her classmates.

“The investment club” counts approximately 20 youths. “We are a generation of ‘immediatists’. We want immediate results. But it is important to study the market and be calm,” says Carolina, who enjoyed learning about finance so much that she plans to study economics next year at university.

Source: Exame