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When it comes to long term options for accumulating financial profits, nothing is as secure as the stock market. This day and age, it is not common knowledge that even the average Joe can make a shiny penny off investing in stocks, provided they do their research and play their cards right. With the cost of living on a climb, financial security is guaranteed to no one. Therefore, the impact investing your side cash into America’s open market can have on your life should be too obvious to ignore. I like to consider it as a savings account that puts your money to work, with the potential to see profits no bank in the world could match.
If you are a beginner to investing in the stock market, like I was not long ago, then you are probably wondering where to start. Luckily for you, we live in an innovative age, where smart phones take the difficulty out of any complicated process with a plethora of applications. Yes there are even apps out there that are perfect for any investor, more importantly investors new to the game. As a matter of fact, it was a cell phone app that started my own journey into the world of stock market investments. It all started with an app called Stash, an app with the premise of setting aside five bucks of cash each week to build your investment portfolio. After a couple years with Stash (and an interest peaked so high it could contend with Everest), I moved on to another application called Robinhood. Now that I have gained a fair amount of experience using both apps, I thought I would write a review comparing the two for the next Eric on the start of their own investing quest. Both apps have their respective “pros” and “cons.” Although in my opinion, one app does hold a place as my personal favorite for being an investing ninja.
A Smart Way to Stash
The investing company responsible for stash launched its application in October of 2015. Brenden Krieg, the app's co-founder and CEO, wanted to make investing accessible to individuals who have a tighter budget than most, while also giving them an outlet to save their hard-earned dollars (even if it were just five dollars at a time). The deep blue-themed application, that is available on both Android and IOS phones, has plenty of positive qualities that make it a reliable resource for rookie market crusaders. The biggest advantage over its competitor being: the ability to purchase fractions of stocks at a time, as opposed to having to cash out on the entire thing. For instance, say you want to start investing in Tesla but you don’t have the 300 something dollars it costs to purchase a share… Stash allows you to invest as little as five dollars at a time, chipping away at that pricey share until you own it completely. They even grant you with a complimentary five dollars to add to what you have to start with upon signing up. This is an attribute that gives Stash a leg over Robinhood and many other investing alternatives. The application also features an entire section dedicated to teaching beginner investors everything they need to know when it comes to building their portfolios of equity. These two qualities are exactly why I would recommend Stash to anyone starting out in the world of Stocks and ETF’s.
The Uglier Side of Stash
As good of an investment outlet as Stash proves to be, it has some flaws as well. The biggest being the fact that it charges you a dollar a month to maintain your portfolio. In the beginning stages of any investor’s journey, especially an individual with the lack of funds needed to purchase a stock in its entirety, the financial gain is not all that high. Therefore what appears to be an insignificant dollar charge can actually work against the growth of your portfolio in the long run. Another factor that hurts Stash’s potential is the fact that the presented selection of investment options is nowhere near as wide as its competitors. A prime example would be the absence of crypto-currency. The fact that transactions take roughly three days to process can also cause frustration for the more impatient investor.
A Robinhood for Our Generation
The founders of Robinhood have one of the most inspirational back stories ever. With the initial blueprints of the application being rejected over 70 times, the startup company founded by Vlad Tenev and Baiju Bhatt is worth a whopping 1.3 billion dollars. It is now the primary investment outlet for millions across the country (including myself). Upon signing up, the app grants you a random stock on the house, with even a chance at winning stock from Apple. The most obvious advantage it holds over Stash is a commission free service. That’s right, Robinhood allows you to put your money to work with no backfiring cost. A selection of hundreds of stocks and ETFs, along with the option to invest in cryptocurrency, Investors are provided with the potential to build a portfolio with an undeniable range of diversity. Robinhood will also send your phone notifications constantly throughout the day; updating you on breaking developments in the market. Live graphs, that are fairly simple to comprehend, track the ups and downs of the stocks you choose to follow as well. Investment trades also process fairly quickly, making Robinhood noticeably more efficient then stash on the day-to-day.
Unfortunately, nothing is perfect and Robinhood is no exception. In spite of all of the positive qualities the app contains, there are some faulty qualities that can be found. The most obvious is the fact that unlike Stash you can’t purchase stocks in increments. The only way you can purchase a stock on Robinhood is if you cash out on the entire thing. In addition to that, transfers from your bank to your portfolio can sometimes take too long to process. And if for whatever reason your bank lacks the funds to support the original transfer, investors will be charged a significant fee. Beyond those few negative traits, there isn’t a whole lot of bad anyone can say about the application.
If done correctly, investing in the stock market can set you up for a future some only dream of. Just like anything else, the sooner you start the better your odds may be. Even though I made a point to clarify that Robinhood was my preference for maintaining my own portfolio, I also believe that each app serves its respective purpose. Stash, the app that allows individuals to start small, is the perfect choice for investors in the first year of their journey, while Robinhood, the app that lives up to its name, is more suitable for investors who have already gotten the hang of building and maintaining their portfolio. As extraordinary an impact that both of these apps have had on investing today, it is hard not to wonder if this is just the beginning of the future of the American stock market.