Starting early

Most teens aren't ready to invest in stocks, one financial planner says.
Financial planners and investment officers are saying the stock market's plunges in the past two years are the worst they have seen in decades.
Scandals such as those involving Enron and WorldCom, combined with the damage done after the Sept. 11 attacks, have made it difficult for the stock market to recover.
But the downturn of the market isn't why Holly Franceschelli, 20, of Struthers, isn't investing her money.
Franceschelli, who works at 579 in the Southern Park Mall, said she puts at least half of her paycheck into a savings account to help pay for her college tuition.
Even though she had a class in high school that taught her a little about the stock market, she said she's not confident enough with her knowledge to start investing.
"I don't really know too much about it," she said.
Don Samuels, a financial planner and investment adviser in Boardman, said Franceschelli is typical of most young people.
"I'm not sure even with the market today, the kids even know what's going on," said Samuels, who has taught a financial planning program at Boardman and Lordstown high schools. "Most of the kids don't care -- well, I shouldn't say that -- they don't know about the market."
Young investor
And then there's 14-year-old Steven Hughes, who started investing in the stock market two years ago and now owns stock in three companies.
Steven has been delivering The Vindicator for the past four years and said he invests most of the money he earns from his paper route.
He said he keeps $4 a week from his paycheck, and the rest "first goes into a saving account until I can get enough for a certificate of deposit, then it goes into the stock market, and that's where it stays."
Since Steven plans on keeping his money in the stock market as long as he can, he said he wants to be sure he's choosing stocks that are going to grow. So he gets advice on which stocks to chose from his dad and grandpa.
"They're kind of like my financial advisers. I tell them what I want to invest, and from there they pick what stock will be better for me in the long haul," he said.
Like anyone would, Steven admits he doesn't like to see the price of a share drop.
"I get bummed sometimes," he said. "Pfizer went up $1.75 one day, and the next day it went back down $1.75. Man, I was right back where I started from."
Samuels said some first-time investors might be disheartened if they are familiar only with the market slumps of the past two years.
"If you started investing in 2000, it only went down. You're hurting. If that's your first experience, you'll be discouraged," he said.
Charles White, vice president of investments at Moors & amp; Cabot in Liberty, shared similar sentiments.
A stock market dip "affects teenagers exactly the same way if affects adults: It get discouraging," he said. "You have to have patience and wait for it to recover. Even people who are experienced are discouraged and disgusted. It's been a long time since we've seen this type of market."
Steven said he understands that ups and downs are the reality of the stock market.
"Stocks are gonna tank. It's gonna happen," he said.
When he heard about the Enron scandal, he said, "it made me feel sorry for my friend because he had Enron stock. ... Enron shares are expensive."
But he said he doesn't worry very much when the price of his stocks goes down.
"You really don't lose money until you sell your stock. As long as you sell for more than you buy it for, then you're OK," Steven said. "Stick with it; in the long haul, it'll be better."
And that's what the professionals say too. They expect the stock market to begin a slow recovery soon.
Teen investment
Samuels said it's not realistic for most teens to invest. "You should be about to invest money for at least five to six years," he said. "Once you have discretionary income, that's the time to start investing."
He described discretionary income as money that is available after all the necessities have been paid.
Dave Bennett, senior vice president and branch manager of Butler Wick and Co. in Youngstown, said someone interested in investing for the first time would be best suited for a mutual fund.
He said a mutual fund contains an assortment of stocks and tends to be less risky than buying stock in one company.
He said he wouldn't recommend investing to a teenager because he fears "they're going to invest something at 15, 16 and need it at 18 and get less back. ... The biggest problem with that is that they are going to be deterred from ever investing again."
But Bruce Joseph, of Joseph and McCullough Financial Advisors in Boardman, said the rewards of investing are lucrative to the patient investor.
He said if someone had invested $1,000 in the Investment Company of American, a mutual fund, 10 years ago, it would have been worth $17,759 at the end of 2001, without ever having added money to the fund.
He said it will most likely continue to grow, although not necessarily as quickly.

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