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As computer and mobile technologies continue to emerge, applications that allow people to trade and invest on the go have also risen in popularity. But can these apps handle your trades and investments?
Trading and investing are two different activities with the same goal: making your money earn money for you.
Trading is buying and selling stocks, commodities, or securities to earn money. In contrast, investing is placing your money in a company you believe will do great so that when the company’s stock value increases over time, your investment will, too.
So, what apps can you use to start your stock investment journey? How much do you need to start investing through these apps, and how can they make you money? Are they secure?
This article discusses stock investment and the apps you can use.
It will also give insights into the types of investment you can make using these apps, how to use these programs to invest in stocks, and the initial capital needed.
As seen in the number of stock investment and trading apps that have emerged, portability is the new mantra in software development.
Mobile apps allow you to monitor the stock market index anywhere you go. Because of their accessibility in different environments and devices, these investment apps have become invaluable tools for many traders and investors.
Learn the pros and cons of using stock investment apps and how secure these applications are so you can decide whether to start investing today.
What Is Investing?
Investing is buying assets you expect to increase in value over time. You get returns through income payments or capital gains. But not all investments are sound investments, so make sure you buy securities or assets you believe you’ll profit from over time.
Getting Started
Some people maintain savings accounts. But if you have funds to spare and the patience to learn how to trade, you can put your money to work and profit through trading and investing.
What’s the Best App to Start Investing in Stocks?
There are several investment apps in the Apple App Store or Google Play. They’re so accessible that you can download and install them in seconds. But ensuring that they’re legit? That’s a different topic altogether.
Look for the following if you want to find the best investment apps:
- The app should be transparent about how it makes money.
- It should be licenced by a local/foreign financial regulator, ensuring that the licence held permits the Company in offering and engaging in CFDs/Forex/Indices/Commodities/Futures/Stocks trading.
- The app should ask permission before accessing sensitive information or resources like the user’s current location.
- The app must have responsive customer support.
Investors who prefer a “hands-off” approach can use apps that provide automated financial services or investment programs.
What Is the Safest and Best Stock Investment App?
The safest stock investment apps usually require passwords or have technology like biometric identification. Still, finding a secure stock investment app can be challenging, especially with the emergence of various technologies.
For instance, many of these stock investment apps now offer robo-advisory services. While such platforms provide automated financial planning services with no human intervention, the security of this technology is a valid concern.
So, are robo-advisors safe? Using them is neither risky nor safe. Robo-advisors merely provide investors with various risk and timeline preferences they can choose from. The bottom line is that the riskiness of portfolios managed by robo-advisors depends entirely on the investor’s preferences.
Robo-advisors offer an accessible way to kick-start your investment strategy with a minimum deposit only. These services consider your financial goals to help create an automated investment account customised to your objectives.
These apps and platforms allow individuals to invest in stocks, bonds, and cryptocurrencies. These apps also offer commission-free trading. Select apps have an account minimum or may offer $1 deposits, sometimes called “spare change” minimums.
Ultimately, the best stock investment apps combine these ideal characteristics into a handy, easy-to-use program.
What Is Ethical Investing?
Even in investing, some individuals choose to incorporate their ethical principles. Ethical investing is picking investment options based on value-driven, ethical, and moral principles.
The Main Types of Investments
Investors can choose from different kinds of investments. Here are the most common investment types:
Stocks and Shares
Stocks represent ownership in one or more companies. Meanwhile, shares specifically refer to ownership in a particular company. The more shares an investor holds, the larger their ownership stake in that company.
You can also trade or invest in fractional shares if you don’t have enough money to purchase an entire share.
Exchange-Traded Funds (ETFs)
Exchange-traded funds (ETFs) are like a “basket of securities”, similar to a trolley full of goods. This trading basket can include stocks, commodities, or bonds traded on an exchange.
Because ETF prices change throughout the trading day, you must monitor them to see if you’re making a profit. Active traders favour ETFs because they can diversify their investment portfolio.
ETFs allow you to invest in assets like cryptocurrency and even retirement accounts.
Why Are Stocks and Shares So Special?
Stocks or shares are special because when you buy them, you buy a small stake in a specific company. Maintaining a savings account can only yield a small, fixed amount through interest rates.
On the contrary, when the stocks of the company you’ve invested in grow and expand, so does the value of your shares. On the other hand, there is also a chance your shares could lose value if the company does not perform well. If you want to ensure sound financial planning, invest in the stocks of companies with the potential for healthy growth.
Why Invest in Stocks and Shares?
Stocks and shares offer investors a wide avenue for growth or capital appreciation over longer terms.
Let’s say an investor retains stocks from a progressive and growing company. After 10 to 15 years, the value of each share may have appreciated high enough that it has started resulting in positive returns.
How Do Investing Apps Work?
Investing apps process and link your personal and financial information to online trading and investing platforms. These apps then connect to exchanges and indexes that update in real-time.
These software are computer programs designed to operate on your phones, tablets, or gadgets that simplify complex financial processes for investors.
The Rise of Apps
Apps rose to prominence with the development of better smartphones operating in Android and iOS systems. Complex investment and trading services are now translated into mobile apps you can download and install.
Do Investment Apps Really Work?
The effectiveness of investment apps depends on the user, how the app is used, and how knowledgeable the user is in trading principles and investing strategies.
Aside from effectiveness, investment apps are also cost-efficient. Designed to streamline and simplify trading, they are significantly cheaper to purchase than hiring financial advisors.
However, investment apps offer limited education resources and investment advice compared to an actual advisor whom you can consult regarding specific financial situations.
Are Investment Apps Worth It?
How profitable you may be ultimately depends on how you use investment apps. Here are the benefits and risks of investment and trading apps:
Benefits
- Low-cost to no management fees
- Accessible resources
- Low barrier to entry (has a shallow learning curve)
- Ease of use
Risks
- The game design of apps may nudge users into making riskier decisions
- Limited to no access to professional experts or their advice
- Most apps have a basic design and lack sophisticated trading tools like charts
- Most apps offer limited trading and investing options, mostly in stocks and ETFs
How Much Do Investing Apps Cost?
Several investing apps can be downloaded for free. Just remember: they might require a bank account and a credit or debit card (or another payment option) before allowing you to start investing.
Some apps or trading platforms have a monthly fee or a required minimum investment or minimum deposit. Others offer users free sign-ups to create a stock investing account and start trading.
Due to the cut-throat competition among app developers, brokerage platforms, and investment mobile apps, companies offer their apps at cheaper rates. Investors should maximise this opportunity and take advantage of the low prices.
You can start small by investing in apps that accept spare change investments.
People are drawn into investing despite the risks because of the potential rewards and profit. Still, these investors should be prepared to dedicate their time, effort, and money to advance in this lucrative career, and also understand the potential for losses.
Deciding How Much Money to Invest
When deciding how much to invest, experts follow a financial guideline suggesting that you set aside 50% of your income for needs, 30% for wants, and 20% for savings and investments.
Deposit investments immediately to your savings account to avoid spending this money on other expenses or wants.
Trading Costs
When you start trading or investing, whether via apps or through brokers, you’ll encounter costs like trading fees or transaction fees like the broker’s commission. These expenses are deducted from the transaction amount.
Beware of ‘Indiscriminate’ Trading
Stockbrokers and experienced retail investors advise against indiscriminate trading and have these tips:
- Downturn trends don’t automatically mean there’s a problem. Conduct research and investigate reasons for price dips.
- Selling out of fear of further stock price dips can be a mistake. Downturns don’t always mean there’s trouble.
- Stay updated on financial news, and don’t get swayed by sensationalism. Approach news objectively and do your research.
- Remain calm during turbulent times and prepare for situations affecting your investments or finances.
How to Invest Your Money Using an Investment App
You can invest your money through expert-managed investment apps or sign up for self-managed investment applications. Here’s how they differ:
Expert-Managed Investment Apps
Professionals can manage your investments through expert-managed investment apps. Deposit your money into a brokerage account, and an expert will handle your investment.
This professional can recommend investments and strategies to increase your money over a specific period while guaranteeing security. Apps with “robo-advisor” services fall under this category.
Self-Managed Investment Apps
You can trade on your own using self-managed investment apps. However, this approach can be intimidating for new investors.
Picking the right shares, funds, or ETFs can be tricky– more so without a solid trading strategy.
The Evolution of Investing Apps
The advancement of internet technology and mobile and computer programming contributed to the evolution and rise of investing apps. Initially, desktop apps were the focus of developers. But with the boom in mobile device usage and technologies, developing apps for phones has taken the spotlight.
Desktop vs. Mobile Experiences
Investing apps can be desktop apps or mobile device apps. Regarding functionality and user experience, desktop apps are far superior to mobile apps.
Still, these desktop apps lack portability. Mobile software are trimmed-down, compact versions of their desktop counterparts. These apps enable trading on the go.
What Are the Advantages and Disadvantages of Using an Investment App?
These are the pros and cons of using investment apps:
- Pro: Apps make investment simple for beginners. There are different apps for different financial markets and needs.
Some apps include educational materials on trading and investments.
- Con: Apps have little to no personalised financial advice. Most educational resources included in apps are generic.
Detailed advice customised according to experiences and personal finances can be limited. Also, customer support can’t answer all your investment questions.
- Pro: Apps tend to offer low minimums and fees to investors, attracting newcomers into using the app.
- Con: Signing up for an account can be enticing due to the low-cost transactions. However, if you lose track of these minor expenses, they can accumulate over time.
What’s the Difference Between Finance Apps and Investing Apps?
A finance app helps manage your finances, helping you save, spend, and allocate money for your daily needs.
Meanwhile, an investment app focuses on investing money in stocks or commodities. These apps provide user-friendly platforms for investors to use their money and, hopefully, make a profit.
Frequently Asked Questions
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Can you use investment apps to trade stocks?
You can trade stocks if the investment app is also an online broker.
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What assets can you trade on investing apps?
You can trade securities like stocks, ETFs, options, and bonds if the app is an online broker.
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Are investing apps good for active trading?
Active traders should choose apps with trading capabilities. You can trade or invest assets– from stocks to cryptos, like Bitcoin. Some apps offer additional features like options trading.
Options trading involves giving the buyers the right – but not the obligation – to sell or buy the underlying asset at an agreed-on price on or before a set date.
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Is the money I use to trade on investment apps insured?
Investing money through apps carries risks as the money in the market is not insured.
While popular apps offer protection against unauthorised activities, they don’t protect you against financial losses caused by market swings or poor investment decisions.
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Who should consider using an investment app?
Traders can consider using an investment app to upgrade their trading activities. These apps cater to different financial needs and goals. With enough research, you can pick the best one for you.
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What is a ready-made portfolio?
This type of portfolio combines more than one investment grouped in one fund and invested in different markets, countries, and sectors.
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How do I invest money?
Through conventional investment apps, you can invest in individual retirement accounts, taxable brokerages, and education investment accounts. You can also deposit funds through credit card or bank transfer.
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How do I invest in stocks?
When investing in stocks, remember the following:
- Select an investment approach. New investors are more likely to invest in individual stocks.
- Decide the amount you want to invest.
- Open an investment account.
- Determine your asset allocation.
- Pick the stocks you wish to invest in.
You can follow these tips or ask for a financial advisor’s assistance.
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How much should a beginner invest for the first time?
If you’re investing for the first time, check if the app requires a minimum investment. For example, some brokerages in the United States allow you to invest minimal amounts like $10.
Meanwhile, investors in the U.K. can start their investing venture with as little as £25 a month. Some investing apps even accept as low as £1. Essentially, the amount you invest hinges on your capacity and willingness to risk a portion of your income.
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Is it really that easy to invest?
Yes, investing is easy. You can do it through mobile apps. What’s challenging is to ensure that you profit from your investment. If you can get advisors, grab this financial opportunity.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial advice. It is not intended to be a recommendation to buy or sell any financial instrument or engage in any investment activity.
While we strive to provide accurate and up-to-date information, we do not guarantee its completeness or accuracy. We rely on various sources for the information presented, and we cannot guarantee the reliability or accuracy of these sources.
The information provided here does not necessarily reflect the products or services offered by our company. Any mention of financial products or services is for informational purposes only and should not be considered an endorsement.
All investments involve risk, including the potential for loss of principal.
This information should not be considered as financial advice. You should always seek professional financial advice from a qualified advisor before making any investment decisions.
References
- Investing vs. Trading: What’s the Difference?
https://www.investopedia.com/ask/answers/12/difference-investing-trading.asp
2. What Is Investing? How Can You Start Investing?
https://www.forbes.com/advisor/investing/what-is-investing/
3. 5 signs you can trust an investment app with your money
https://www.businessinsider.com/personal-finance/investment-apps-trustworthy-signs-2021-2
4. 5 Cool Stock Tracking Apps That Are Easy To Use
https://www.forbes.com/sites/robertberger/2021/05/16/5-cool-stock-tracking-apps-that-are-easy-to-use/?sh=2c7dda3661c2
5. Robo-Advisor
https://www.investopedia.com/terms/r/roboadvisor-roboadviser.asp
6. Shares vs. Stocks: What’s the Difference?
https://www.investopedia.com/ask/answers/difference-between-shares-and-stocks/
7. What Is an Exchange-Traded Fund (ETF)?
https://www.investopedia.com/terms/e/etf.asp
8. The top 4 investing apps to help newbies and experts build their wealth from anywhere
https://www.cnbc.com/select/best-investing-apps/
