The year 2021 has been abnormal. Things happened that have never happened before, and in the continuous stream of unprecedented things happening, they seemed routine.
One of those unexpected stories came not from the medical world but the world of stock trading.
Many rookie investors got together, decided to take on a giant hedge fund, and beat them at their own game. What unfolded captivated the world.
The story's center was a failing US chain of video game retail stores' GameStop,' whose stocks were losing value. The multi-billion-dollar hedge funds were betting on stocks falling to zero. Basically, they were short selling or shorting.
Any other day, they would have made a profit in billions, but not today. The members of a Reddit forum r/wallstreetbets came together and started buying GameStop's stocks, and the stock price rose. The hedge fund saw its billions of dollars going down the drain.
The world sat captivated, watching a bunch of nobodies bringing a hedge fund to its knees. Instead of winning, the hedge fund lost billions.
While the hedge fund had a lot of money, innumerable number-crunching actuaries, and pro stock market players as experts, those Redditors had nothing but a smartphone and an investing app.
For me, this is the most important takeaway of this story.
With Covid-19, millions had been locked away in their homes. They turned towards these investment apps. Without a large sum of cash, a detailed analysis of the market, and the need for a broker, you can invest your money the way you want.
This gave rise to a whole new generation of investors.
Individual investors opened more than 10 million new brokerage accounts in 2020 through these apps. Let's look at some of these apps that are changing the world of investment as we know it and allowing individuals to place their bets while sitting on a sofa in their living room munching on nachos.
SoFi
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SoFi (Social Finance) is an all-in-one money app covering everything from investment to student loans and borrowing. It is commission-free, where you can start investing with $1.
What are the investment options: SoFi Invest is one of the components of SoFi, which offers users multiple investment options like stocks, ETFs, cryptos, and even investment in IPOs.
Who should try this app: It is a low-cost investment app, ideal for those who are fee-conscious and apprehensive of losing their money – both in commissions and market fall.
What are the standout features of this app:
Fractional shares: SoFi allows users to invest in fractional shares. So, you can buy a part of a share of your favorite company and not the whole share. You can also diversify your portfolio with over 4000 stocks, including Alphabet, Apple, Google, etc.
Retirement accounts: With SoFi's retirement accounts, users can set goals and start saving for their retirement through Traditional, Roth, and SEP individual retirement accounts (IRA).
Automated investment: If you don't feel like having enough knowledge to choose and invest in any stocks, you can choose SoFi's automated investment. It sets up a portfolio for you, invests your money, and manages it. Bonus: It has no management fee.
Robinhood
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Robinhood is being credited for making stock investment simple and accessible for beginners. The app markets itself as a free tool that is democratizing investing and trading. Over ten million accounts have been created on this app.
What are the investment options: Robinhood allows investments in stocks, gold, ETF, options, and cryptocurrencies.
Who should try this app: If you are a beginner or just testing the waters before diving in, you should use this app. It has a simple interface that makes it easy to choose assets to invest in.
What are the standout features of this app:
User interface: The app's simple UI is what made it such an attraction for novice investors. With just a tap, you can own stocks and cryptocurrency.
Commission fee: The app charges a 'zero' commission fee from investors. So, if you want all to have your pie and eat it too, this is the place. For those wanting to invest in small quantities, there is no limit to the minimum balance in your brokerage account.
Unlike other crypto trading platforms, Robinhood doesn't require any minimum amount to trade for crypto lovers. Here, bets trades can be placed in small quantities.
Instant buying power: Robinhood users have instant access to deposits, unlike other platforms that require a few days to clear the funds. Similarly, after closing the positions, users can instantly access their funds.
Robinhood Gold: The app's paid version where users have to pay $5 to access premium features like professional research, market data, and approval for margin trading.
IPO access: The app also allows IPO access to users. They can request stocks in a new company even before its offering.
Acorns
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Acorns is another fintech company focusing on millennials and providing an all-in-one solution for their financial needs like investment, savings, and retirement plans.
It has three subscription plans: Acorns Lite for $1/month, Acorns Personal - $3/month, and Acorns Family for $5/month.
What are the investment option: With Acorns, you can invest in asset classes, ETF, fractional shares, and bonds.
Who should try this app: Those looking for conservative investment options to minimize their risk profile should set up and start investing through Acorns.
What are the standout features of this app:
Five investment portfolios: Acorns has set up five investment portfolios with asset classes depending on your choice o risk profile. With automated investment, your money goes into any portfolio, depending on the risk profile you choose.
Security: Acorns use bank-level security, two-factor authentication, and 256-bit encryption for added security. The extra layer of security means you can put all your money in without any fear.
Acorns Checking: It is like your bank account that has a Visa debit card. It provides digital banking services like check sending, mobile check deposit, and direct deposit.
Stash
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Stash is a personal finance app that aims to simplify investment for beginners. It has three tiers:
Stash Beginners for $1/month, Stash Growth for $3/month, and Stash Plus for $9/month.
What are the investment option: With Stash, you can invest in stocks, ETFs, and bonds.
Who should try this app: Stash is a suitable option for those with basic – or no – investment knowledge. The app lets you learn about investment through guidance and financial advice as you diversify your portfolio and multiply investments.
What are the standout features of this app:
Stash Bank: It works like a conventional bank to fulfill all your financial needs without the usual irritants like hidden fees, minimum balance requirement, and an overdraft.
Stock-Back Cards: A debit card that you can use to shop and also earn rewards in the form of stocks. These stocks replace the traditional points system that expires after a time. How cool? You can actually multiply your money while spending it.
Security: Stash offers peace of mind by implying various security features like 256-bit encryption, Transport layer security, biometric recognition, and access control to protect your money.
Usual caveat:
These trading apps have simplified the investment and made it easier for young people to start investing with little money. However, while evaluating your options, it is wise to read about the app's legal and privacy policy.
Don't get fooled by the no-commission fee or 0$ starting amount. With financial services, one should always read everything. Even the line is written at the bottom of the page in the minutest fonts.
This is one of the best stock trading apps, just like airg scam free apps.
Final words
Stocks trading is no more the job of a few handfuls who know the ins and out of the market or the brokerage firms sitting on large cash. Today, anyone with $10 can open up their broker account through one of these apps and start multiplying it.
If you have invested through one of these apps, we would love to know your experience in the comments below.
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