Investing was once a luxury for the wealthy. Today, technology has democratized the investment space and people of all financial backgrounds can get started with direct investing.
The simplest way to get started is with an all-in-one investment app.
There are many investing apps that are accessible to most people. All you need is a bank account with some money to spare, and a device with an internet connection. However, some apps stand apart from others by excelling in certain ways.
So, let’s dive into the best investment apps and where specifically they excel.
If you’re looking for a low-cost and simple entry into the investment space, Robinhood is for you.
As its name suggests, the app was designed to make it easier for non-professional investors to reach their investment goals. To reach that result, Robinhood has some of the smoothest interfaces of all investment apps.
Robinhood stands out for its unique role in helping (at least partly) democratize investing. The app does this in two ways:
At a glance, Robinhood doesn’t leave too much to be desired. Investments include public US stocks, ETFs, options, and cryptos. There are no commissions for trades for any of the investment vehicles offered on the platform.
Unlike many apps and traditional brokerages, Robinhood has no minimum investment requirements for normal trading and investing. If you want to get started with a simple $50 zero-commission investment, that’s completely fine.
The only major restriction is a minimum balance of $25,000 for day trading. Given that day trading is one of the highest-risk and skill-intensive methods, new or non-professional investors don’t need to consider it anyway.
Robinhood offers some research material that can help users educate themselves and keep up with financial news. It doesn’t excel in this way relative to other apps, but amateur investors can take advantage of these resources to make better-educated decisions.
Robinhood is popular and its strengths are well-understood in the finance space, but the company has had its issues. Robinhood faced tremendous backlash from the public for stopping users from investing in Gamestop, Nokia, and AMC stocks.
They’ve also faced scrutiny from the SEC for not disclosing its relations with partner trading firms.
Overall, Robinhood has become widely popular for good reasons. It has its shortcomings which are worth keeping in mind, but it’s a simple, low-cost app that is good for beginners to investing.
TD Ameritrade is not as simple and beginner-friendly as most other investment apps.
But it makes up for that with some of the most thorough educational resources available. In fact, it’s the platform’s excellent resources and overall customer support that makes it shine.
For investors who are well-versed in the different asset classes, TD Ameritrade has a lot to offer. This makes them a good choice for investors of all experience levels.
Beginner traders don’t need to be intimidated by the resources they offer. In fact, helping clients with different backgrounds and knowledge levels is part of what makes TD Ameritrade so well-received by users.
Some of the available features include:
TD Ameritrade goes as far as to offer classes and even in-person guidance at branch locations in the US. They offer classes on:
These educational features help TD Ameritrade walk beginners through the investing world.
Where TD Ameritrade lacks is in some investment assets. There is no fractional share investing or cryptocurrency investing (with the exception of Bitcoin futures). In addition, there are higher costs associated with using the platform. Margin trading, in particular, is very costly.
If you’re fine with higher costs and greater complexity, but appreciate a service that helps you keep up with your investment goals every step of the way, TD Ameritrade is a great investment app.
Robo advisors are a new development that has become increasingly effective. They offer a hands-off method of investing, normally for an advisory fee.
Wealthfront is an app that combines traditional financial planning tools with the deployment of robo advisors. Like other robo advisors, Wealthfront:
While all but the first of these features sound negative, they are offset by the benefits of robo advisors. In addition, Wealthfront offers a reasonable balance, relative to similar apps.
The advisory fee for Wealthfront is a reasonable 0.25%. The minimum investment is $500, which is also quite reasonable for what you get.
Your choice of investment with Wealthfront is limited by the standard limitations of robotic investment applications. Wealthfront actually has a large selection of US and foreign stocks, as well as municipal, federal, and corporate bonds.
In terms of the work you need to put in, it’s still your responsibility to understand investment assets and risks. That’s a part of why Wealthfront requires a meaningful but minimal set of inputs from you; you can set your risk appetite and view the asset classes it supports.
This versatile and hands-off option makes Wealthfront a good option for investors without the time to go through a more thorough investment process. Wealthfront is also an especially intuitive and simple robo advisor platform, offering the best of the robo advisor investing benefits.
Many platforms support day trading, albeit with special warnings, considerations, and restrictions. Because of that, it’s harder to single out one app for day trading.
E*TRADE makes day trading more affordable by not charging anything for stock, ETF, and options trades. There are also no minimum investment requirements, enabling a wider range of investors to benefit from their services.
Day trading with an app comes with a different set of ideal circumstances. E*TRADE creates those circumstances with low costs and easy execution. At the same time, it offers extensive resources for all kinds of investors, including day traders.
The app’s built-in risk assessment feature enables users to constantly monitor the risks associated with individual decisions.
The investing app space is diverse and there are many options for prospective investors. We’ve highlighted the top 4 investing apps for people looking for a specific package with the app they choose.
It’s important to weigh the costs and customer service of any app you’re considering. Beyond that, features, especially educational resources, can make a big difference for your experience.
June 30, 2022