‘I’m 16 and Grandma got me hooked on investing. How do I start?’

I’m 16 and really interested in investing. I’m not old enough to start buying stocks but have been practising by helping my Dad to pick companies for his fantasy fund in The Telegraph’s stock picking competition. I’ve done quite well and have been among the top 500 players at times. 

I want to learn more and even decided to go along with my Grandma to one of her investing club meetings where she and her friends talk about which stocks they’re buying. At first I just invested in companies I knew, like drugmaker AstraZeneca. Since then I’ve started reading about stocks online and in the newspaper and I’ve done better and better.

I’ve just started college and am studying sports science but want to continue learning more about the stock market in my spare time.  I’ve got a cash Isa with about £1,000 in that I’d like to invest when I turn 18. 

Opportunities to learn about investing at school are not great. I wanted to do GCSE business, but it got dropped because the teacher left. My dad did some research online and found an app where you can invest in contracts for difference when you turn 18, but I don’t know if that’s what I’m after. Where should I look to learn more about investing?

Dawson Rogers, Banbury  

You’re absolutely right – contracts for difference are definitely not a good place to start learning about investing. They are very risky and more than three quarters of people, some of whom will be experienced investors, lose money on them. 

It sounds like you have already been savvy enough to realise this and have adopted a good strategy by investing in what you know. Understanding a company’s business model before you buy its shares is very important, as it will help you to see whether it is doing well or not. 

If, for example, you invest in sportswear retailer Nike and suddenly see all of your friends ditching their Nike trainers for a new brand, you might think about selling. 

There is, of course, more to it than that. Reading newspapers and articles online can help you to understand how to look at a company’s finances and decide how strong they are. If a firm has high on-going costs, isn’t making much money and doesn’t have a lot of cash in the bank, those are all bad signs. 

You could also expand your stock market skills by taking part in competitions, such as the ones run by the London Institute of Banking & Finance, a college. It runs a student investor challenge, where teams of secondary school and college pupils invest virtual money in the stock market to see who can make the highest returns. It also offers prizes for students being creative about learning about money or writing articles about it.

Watching films about stock markets are another good way to discover what – and what not – to do. From The Big Short, a Hollywood blockbuster documenting the start of the 2008 financial crisis, to Freakonomics, a documentary based on a best-selling book about markets, there are plenty out there. 

It can also be helpful to read biographies of famous investors such as Warren Buffet.

Listening to podcasts can be helpful, too. Robinhood, an American investing app, has a daily one called Snacks which decodes the day’s stock market news. The Telegraph’s own It’s Your Money podcast has episodes on investing for beginners.

You won’t be able to invest money in stock markets yourself until you turn 18. But you can continue expanding your knowledge until then. When you do invest your savings, you should do so in a stocks and shares Isa, as any profits you make will be tax free – meaning more money in your pocket, or to reinvest.

You should compare fees charged by different stock brokers. Some charge a percentage of your total investments, while others have a flat fee of, say, £10 a month. The latter can really eat away at your savings if you don’t have much to invest.