At Euronext, we believe in the power of the next generation to become the investors of tomorrow. As part of World Investor Week, we are committed to equipping young and first-time investors with the knowledge needed to navigate European capital markets confidently and responsibly.
This article is the first in a three-part series in celebration of World Investor Week designed specifically for first-time investors, with the aim of making investing more accessible, understandable and empowering for those just beginning their investment journey. Stay tuned throughout the week for more insights for first-time investors.
Building confidence through education
Investing may seem complex at first glance, but understanding a few foundational concepts can help demystify the process and foster long-term financial empowerment. With more digital access to financial markets than ever before, now is the time for the next generation to build financial confidence.
What does it mean to invest in stocks?
When you invest in a stock, you are purchasing a small share of ownership in a company. This share, commonly called equity, entitles you to a portion of the company’s performance, whether through dividends (periodic payments of profit) or capital gains (selling the stock at a higher price than you paid).
Stocks are traded on public exchanges like Euronext, which provide a transparent and regulated environment for buying and selling securities. These markets allow businesses to raise the capital they need to innovate and grow while offering individuals the opportunity to participate in that growth.
A shift in mindset from saving to investing
Many young people are familiar with the concept of saving money in a bank account. Investing, however, is a longer-term commitment that involves allocating your money into assets, such as stocks, with the potential to grow over time.
The transition from saving to investing begins with understanding your financial goals. Are you looking to build wealth over the next decade? Save for a home? Plan for retirement? These goals will influence the type of investments and strategies you might explore in the future.
The value of starting early
One of the most significant advantages for first-time investors is time. By starting early, even with small amounts, you benefit from the power of compound interest. This means any returns you earn are reinvested, potentially leading to exponential growth over a long investment horizon.
Additionally, long-term investing can help smooth out the short-term ups and downs (or volatility) of the market. While stock prices may fluctuate day to day, historically, equity markets have shown strong growth over the long run.
Education before execution
Before investing, it is important to understand key concepts that support informed decisions. These include:
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What is a stock? A stock is a unit of ownership in a company.
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How do stocks work? Their prices are influenced by supply and demand, economic indicators, company performance and global events.
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What are the risks? All investments carry risk. Stock prices can go down as well as up, especially in the short term.
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What are investment strategies? Investors may follow different approaches like long-term investing, dividend investing or index investing, depending on their goals.
Understanding these fundamentals allows individuals to participate in the market thoughtfully, rather than reactively.
The role of stock exchanges in the economy
Stock exchanges like Euronext play a vital role in the financial system. They connect businesses with the capital needed to grow, while offering a platform for individuals and institutions to invest in the future of those companies. In doing so, they foster innovation, job creation, and economic development across Europe.
By investing in listed companies, individuals are not only aiming for personal financial returns but also contributing to the broader European economy.
Empowering the next generation of investors
Through taking part in initiatives such as World Investor Week and our ESG commitment to financial literacy, Euronext supports early engagement with capital markets. We recognise the importance of informed participation, particularly as more young Europeans begin their investment journeys through accessible online platforms and mobile trading tools.
Building for the future
Strategic first-time investing focuses on building long-term financial resilience rather than chasing quick wins. As Europe continues to strengthen its capital markets, young investors will play a central role in shaping the future of our economy. Euronext is proud to take part in initiatives that support financial inclusion, promote education and drive greater participation in capital markets across generations.
Stay tuned for more articles in our Next Generation series throughout World Investor Week, as we continue to explore the building blocks of responsible investing.
Learn more about stock market fundamentals in our Education Centre.
Follow along this week for more insights tailored to first-time and young investors.