Previous posts have looked at popular ways to buy stocks such as How To Invest In Stocks Through A Broker and How To Buy Stocks Without A Broker. Today, we want to take a look at an easy way for small investors to start building an investment portfolio over time through app based investing.
Invest In Stocks Through An App
As the usage of smartphones, tablets, and laptops have increased over the past decade, so has the popularity of app based investing. App based investing is an easy way for young investors and investors with limited amounts of capital to gain access to the stock market. Investors can buy exchange traded funds and stock in major publicly traded companies.
App based investing is best for investors seeking to invest $100 or less. Apps like Robinhood, Stash, and Stockpile allow investors to start buying stock with just a few bucks. You can buy a whole share of stock over time by investing $5 or $10 at a time. Apps like Stockpile allow for fractional investing meaning that you do not even have to purchase one whole share. You can purchase a fraction of a share and gradually build up to a whole share. Purchases made through a brokerage firm must be a minimum of 1 share.
App based investing is low cost investing possessing even lower fees than investing with an online broker. You can buy shares of stock and pay just 99 cents in trading fees
App based investing is no frills investing. It’s a basic platform and you can buy stocks within daily trading windows. You don’t have the same price control as with an online broker which allows you to place limit orders and set a maximum purchase price for each stock. Buying within a trading window means you may pay more for your stock purchase and make less money on your stock sales. It does however give you a low cost way to buy stock with little money.
App based investing is appropriate for beginning investors who are trying to get their feet wet in the stock market. I consider app based investing a good way to get an introduction to stock investing. It helps you to get an investment education buying little amounts of stock. You can get basic investment advice if you don’t know where to start. It will help you pick investments based on age and target retirement date. It’s self-directed investing made simple.
App based investing does not offer anywhere near the investment options or research of an online brokerage. Online brokerages allow for options purchases, mutual fund purchases, bond purchases, and more.