The Advantages of Using Mobile Apps to Invest. You can get all kinds of information regarding the buying and selling of stocks in today’s world. You can find out about a company with insider stock selling. Information technology is a part of every industry these days. Nowadays, this includes the world of finance. So it is essential to understand the concepts and the availability of investment apps where all your transactions are recorded online in real-time without your needing to leave your home.
Small Investing Apps
Investment apps are different, each requiring an additional sum to start. Even so, most apps allow investors to get started with a small amount of money. These apps are called micro-investing apps and will enable you to round off your debit card transactions and invest the spare change for you automatically or allow you to invest a small sum each month. There are several advantages and disadvantages to using investment apps to make your trades.
The primary advantage of using an investment app is that you only need a low sum to start. Some apps allow you to start with as little as $1, while others have a $10 to $50 limit. Before you choose one of these low-investment apps though, you want to read the entire contract to see what you are committing to as some of these apps charge high fees.
General Investment Apps
There are many types of financial investing apps. Basic apps allow you to deposit a certain sum of money and then choose the stock you wish to buy. Most stock investment apps charge a fee on each trade. These fees can vary and start with as little as a few dollars. Other apps charge a membership fee or a percentage of the profit you make from any given investment.
As a general rule, the best investment apps offer easy account access and setup, goal planning features, portfolio management, attentive customer service, and outstanding security features. To find these outstanding apps read reviews and look for the best-rated investment apps available.
The Robo-Advisor Apps
One interesting type of app is the robo-adviser. This type of app is like having a company with insider stock selling tips but given in a totally legal way. It is an app that uses algorithms and creates portfolio options based on information top financial experts have offered.
This type of robo-adviser app ensures you get the best return on your investment and keeps up-to-date information on any given stock and on the overall market.
Are Stock Buying Apps Legal
Financial stock purchasing apps, whether they are robo-advisors or general purchasing apps, hold the same legal status as a brokerage firm. They have to register with the U.S. Securities and Exchange Commission (SEC) before they can trade any stock. These apps are subject to the same laws as any physical brokerage firm.
One negative here is that robo-advisor apps are not insured by the Federal Deposit Insurance Corporations as these are securities bought for investment purposes and they do not function as a bank. Even so, there are a few robo-advisor apps like Wealthfront, one of the largest businesses of its kind, and is insured by the Securities Investor Protection Corporation.
How Do These Apps Work?
When you sign up, you are asked certain questions to determine the level of risk you are willing to take and the type of financial portfolio you want to have. The algorithm then creates a diversified portfolio of stocks for you. At this point, you can determine how much you want to invest every month and set up a direct debit deposit.
Investment apps tend to cost less than brick-and-mortar advisors, which may be why they are so popular. Even so, it is important to analyze an app before you jump in. You need to know what the monthly or annual fee is. Usually, these fees amount to less than 1% of the value of your stock. However, some apps do charge flat monthly or yearly fees.
So What Is the Verdict?
Should I use an investment app? As with any investment you make, do your research and choose one that has the features that work with your lifestyle. Not all investment apps are the same. Yes, most of them are easy to use and they are cheaper than paying for a brokerage firm. The investment amounts can be small, but there are fees that may be higher than you thought. And you may not get the features you want with any investment app.
Keep in mind that despite the mathematical algorithm, the investment apps don’t actually have a consultant to give you advice. You are the one responsible for your financial decisions.