Virtually anybody can buy stocks with the exception of minors and those with insider information.
Conflict of Interest
With the exception of company executives who are privileged with access to “insider” information about upcoming developments that could positively affect the price of their firm’s stock, virtually anyone can buy stock in a company at any time. Provided they have access to a stock broker or an active online stock trading account with a website such as eTrade.
Depending on the state in which you live children cannot buy and trade stocks. The age of majority ranges between 18 and 21. In the case that a minor wishes to open a stock trading account, a custodial account is available in which the parent opens the account for the child then it transfers when the child reaches the age of majority.
See: Custodial Age Limits for Majority for a list of age limitations by state.
In recent years, Internet and technology stocks have taken turns being the darlings of the New York Stock Exchange (NYSE). Early on during the Internet bubble, it was Yahoo! and Amazon. Now, it’s a case of Silicon Valley stocks such as Google and Apple. In the fall of 2010, thanks to ongoing, record quarterly profits, the price of Apple stock continued to rise. The stylish computer products and software company is on track to surpass Exxon Mobil as the company with the world’s largest market capitalization, the byproduct of the number of outstanding shares times the value of each one of those shares.
However, one of the great problems with the stock market is that it does not necessarily reflect the true value of a company. The stock price of Apple has as much to do with the devotion of its consumer fans and their desire to be able to own a piece of the company, as it does with the forecast of 16% in annual revenue growth from 2010 through 2014.
Investing in Stocks through 401K Plans
A large number of Americans purchase stock not directly through a broker or online account, but rather via a managed 401K account at their workplace. In some cases, companies make matching contributions to those investment amounts allocated by individual employees, and during the recent U.S. economic downturn, a great point of focus by the media was the sharp decline in value of employee 401K plans. Thankfully, these have started to rebound in 2010 though again, the recovery of the Dow Jones Industrial Average to pre-Recession levels of 10-11,000 points seems to have little to do with the actual state of the economy, where many are still struggling with the so-called “jobless recovery”.