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First, let’s have a look at some of the best investing apps for beginners:
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Robinhood: Known for its easy-to-navigate interface and commission-free trades, Robinhood is a great app for beginners. It allows for trading stocks, ETFs, options, and cryptocurrencies. It also offers Robinhood Gold, a premium paid account for margin trading and more in-depth market data.
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Acorns: Focusing on micro-investing, Acorns is beginner-friendly because it allows users to automatically invest their spare change by rounding up purchases to the nearest dollar. It includes a diversified portfolio of ETFs, designed by Nobel Prize-winning economist Harry Markowitz, to maximize returns for a given level of risk.
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Stash: An app that allows beginners to start investing with as little as $5. Stash’s mission is to simplify investing so you can do it yourself. It offers educational content to help users make smart saving and investing decisions.
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*ETRADE*: ETRADE is a long-established company that offers online trading in stocks, options, ETFs and futures. The E*TRADE website and mobile apps are easy to use and are loaded with information and features for investors and traders.
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TD Ameritrade: Known for its extensive resources and tools, TD Ameritrade provides free access to research, data, information, and financial resources. It also offers educational content, which makes it perfect for beginner investors wanting to learn more about the market. The app does not require a minimum investment to start.
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M1 Finance: Apt for beginners as it allows them to create “pies,” or circles that are divided into a few ETFs, stocks, or mutual funds. It also offers automated robo-advisory service. Fractional shares purchase also makes it beginner-friendly.
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Fidelity: A favorite among many investors, Fidelity offers a wide range of financial services. With detailed research and a vast plethora of investment options, it’s a great app for those starting in investment.
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Wealthfront: It’s a robo-advisor that offers low-cost ETFs and daily tax-loss harvesting. With a low-cost management fee, it’s a great option for newbie investors. It’s fully automated and creates a diversified portfolio for you.
While all these investing apps have their appeal, it’s important for beginners to know their financial goals, risk tolerance, and investment strategy before commencing. While some are suitable for conservative investors, others are better for those willing to take more risk for higher returns.
Equally important is the need for beginners to educate themselves about investing to make informed decisions. Most of these apps provide educational content to facilitate this learning. A good understanding of basic investment concepts like compounding, diversification, market volatility, bull and bear markets, and the effect of macroeconomic factors on market trends can go a long way in successful investing.
Also, remember that investing involves risks including loss of capital, hence invest what you can afford to lose. No investment is risk-free and past performance isn’t an indicator of future results.