It wasn’t long ago that investing and trading required a direct phone call to place a trade with a broker with hefty commissions. Now you can trade the stock market with a touch of a button with the convenience of a device that fits in your pocket! Technology-driven investment companies adapted to this market demand which makes it perfect for the investing DIY-er. So, in continuing our financial retirement planning series, we wanted to bring you a review on what we felt were the best stock trading apps for the home investor.
*NOTE* This blog is intended for informational use and only with the intention that we can help you make an educated decision in your investment strategies. We highly recommend that you consult with a financial adviser before undertaking any new venture!
The Ins & Outs of The Top 3 Trading Apps Today
For a man 50 and over, investing strategies could be much more risk averse than a man in his 20’s and 30’s. The good news for us is that most (if not all) of the companies provide low to no cost trades, in-depth training courses, and even on-demand consultations. They also bring access to broader investment tools like cryptocurrency and even forex (Foreign Exchange) markets if you want to really diversify. We’ll cover the following three trading apps, how they work, who they are suited for and whether they are worth using:
What makes a trading app better than the rest? We can sum it all up in one short word: convenience. The more convenient the trading app is, the more people are even willing to pay for the service, although these apps don’t charge costly premiums.
eToro
eToro is considered a multi-asset brokerage that allows you to trade stocks, cryptocurrencies, commodities and even currencies all in one location (although as of right now only cryptocurrency trading is available for those who live in the US). Their focus is the “copy trading” feature that allows investors to copy the trades of others on the platform to achieve similar results.
How eToro works:
eToro is also known as a social trading platform that allows users to learn from, socialize about investments, and copy the trades of others at little to no cost. It’s a platform/app that is user friendly to both novices and experts alike. Their multi-asset platform lets you trade almost every type of security available in one central location. This is a major convenience to investors, which is no question why it’s grown to be one of the most popular investing platforms in the world today.
The app includes a free $100,000 demo account for all who open an account with eToro. The demo account is great for investors looking to test the waters before putting some skin in the game. Their research tab within the app includes tips from expert analysts and knowledgeable investors along with helpful chart analysis, and even offline trading.
Who is eToro best suited for?
Because of the social nature of the eToro app, its platform is most likely to attract those who have grown up in the social age of Facebook, Twitter, Pinterest, Instagram and other popular social media platforms. eToro has revolutionized the concept of social media and applied it to investing to “…harness the wisdom of the crowd for the benefit of its clients.”[1] In short, anyone ranging from novice investor to expert analyst who is familiar with the value of social media will enjoy using eToro’s social investing platform.
TD Ameritrade
TD Ameritrade has been around for decades as a popular and highly trusted investment broker. Many investment brokerage firms have struggled to adapt to the technological changes made in the investing industry, such as convenient investing apps, for example. TD Ameritrade has strategically maintained their reputation as a trusted broker while innovating with the industry and making investing as easy as logging on from a smartphone app to place a trade.
You can consider TD Ameritrade a reputable broker for trading and investing that has kept up with fast moving technology changes in the industry, and as a result they are still a top contender for investors looking to trade the markets.
How TD Ameritrade works:
Some new changes that technology has allowed to come to life in the investing industry are commission free trades. Apps like Robinhood (discussed later below) were among many who set expectations among investors to include commission free trades. TD Ameritrade was among the first to adapt to commission free trades.
TD Ameritrade works much like any traditional discount brokerage firm, with the features of modern investing apps like eToro and Robinhood. Their platform allows investors to invest in anything from stocks, options, mutual funds, forex markets, commodities and even cryptocurrency. Should you need the added help of an investment adviser, their platform gives you access to help as you need it. Furthermore, you get access to a variety of accounts ranging from individual broker accounts, retirement accounts, annuities, educational savings accounts and even managed portfolios.
Who is TD Ameritrade best suited for?
We consider TD Ameritrade one of the most universal solutions for traders of all ages experience levels. Anyone wanting to invest, whether you prefer a passive investing approach and wish to have your money managed, to whether you are hands on investor who manages your portfolio yourself.
Robinhood
Robinhood is a modern investing app that provides a simple way to invest for anyone with access to the internet. Their app is about as simple and basic as it can be, while still having the ability to access in-depth research reports for added trading technical analysis.
How Robinhood works:
Robinhood, to many, is considered “the pioneer of commission-free investing…” with options to invest in stocks, options, gold and even cryptocurrency. They have a cash management account that works like a checking account available to those who wish to simplify their money into one place. Their most recent addition to the app is fractional shares investing, or the ability to invest based on dollar amounts as little as $5 rather than being required to purchase a whole share of a company (which can cost thousands to purchase one share of some companies).
They seek to help new investors get started trading the markets with their Robinhood Learn feature that takes complicated investment concepts and puts them into simple terms that anyone could understand. Topics from the Learn feature range from articles about “What is a deposit”, to “What is Equity” and even on topics such as understanding dividend yields.
Who is Robinhood best suited for?
For anyone that wants a quick and easy way to invest and trade the markets, with multiple asset classes available, Robinhood has perhaps the most popular and innovative solution available. Whether you’re an expert investor or a new investor wanting to learn basic investing jargon, Robinhood has made things as simple as possible, while still providing some complexities to those who demand them.
Other Trading Apps Worth Considering
The choices among different trading and investing apps available today are seemingly endless. Along with our three recommendations on the best stock trading apps, we want to preview a few other noteworthy mentions:
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M1 Finance:
M1 Finance is a free investing app that allows investors to build their own “pie” of stocks, choosing which percentage of each company makes up the portfolio. Then, when you make a deposit to invest, it automatically allocates your funds to each company at its designated percentage. If you have 20 companies in your portfolio, each making up 5% of your “pie”, then your next deposited investment will be allocated among 20 companies, or 5% of your funds to each company.
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Motif:
Similar to M1 Finance, Motif allows you to build your own “Motif’s” which are your own portfolios of stocks. You can publicize these Motifs for others to invest in, paying you a small fee each time someone invests in your motif. Or, the Motifs can be private for your own personal use of your investment portfolio.
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Stash Invest:
Stash is a beginner friendly investing app that allows for fractional shares of investing among a choice of hundreds of publicly traded companies. You can also invest in Exchange Traded Funds designed that comprise companies making up certain investing objectives or industry (such as technology companies, or environment friendly companies, for example). They also offer a debit card with a “stock back” option so whenever your card is used, you get stock back added to your portfolio of the stock of the company you made a purchase at, or stock back in the form of an ETF if the company shopped at is not publicly traded.
How to Decide Where to Start…
Choosing which app is best for you all depends on your ultimate investing goal. Are you starting out with a lot of money or just a few bucks? Do you have previous experience trading stocks, commodities or currencies? Do you prefer passive investing with a portfolio manager watching your account for you, or are you a do-it-yourself investor? These are a few questions to consider that will point you in the right direction on where to start. Whichever strategy you pick, day trading may be the fun way to continue to make money well into your retirement.
We hope you’ve found some useful information on the best stock trading apps. As we stated earlier though, the blog is intended only to help you make an informed decision. Any changes to your retirement planning by way of investments should be discussed with a professional financial adviser. As always, if you don’t see something you want, reach out to me directly through our Contact page or leave a comment below. All the best ~ Glen.
References:
[1] https://www.etoro.com/trading/platforms/#section_3
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