5 Great Investing Apps for Beginners

This blog has been prepared for informational purposes only and does not constitute financial or investing advice. You should always use caution when making investing decisions. Rates and fees for the apps listed were obtained as of February 21, 2020 and are subject to change.

There are several ways to go about building wealth – some focus on building their career and earning more, putting their money into traditional savings accounts, 401ks, and IRAs, while others may focus on putting their money to work for them through investing in stocks, bonds, and ETFs. While many young adults have previously shied away from the stock market and investing in the past, a recent study showed that seven in ten millennials are financially investing in some way, and that 85% of millennials do not feel too young to invest. 

Why the change? From national student loan debt reaching record highs, to the housing market being generally more expensive for buyers, there are certainly enough reasons for millennials to focus on finding new ways to build their wealth, rather than just using traditional savings. 

If you’re a believer that history repeats itself, you may find the stock market to be a good opportunity to grow your wealth. Since its inception in 1896, the Dow Jones Industrial Average has delivered an average return of 5.42% per year, and the S&P 500 index has delivered an average return of 7.96% from 1957 to 2018. 

For the new investor, however, getting started can be a bit overwhelming. Some questions beginners might ask: What should I invest in? Should I invest in stocks, bonds, or ETFs? Should I manage my portfolio or allow a robo-investor to manage it? What about cryptocurrency? Which is going to get me the best return? Which strategy is the safest? Should I be thinking long-term or short term?

Luckily, there are a variety of applications that serve well for individuals that are just getting started on their investment journey. Here are five great apps that all have unique benefits for individuals looking to start investing.

Robinhood®

Robinhood ® launched in 2013 and took the digital investing world by storm by offering commission-free trading along with a free trading account and providing users with a free stock for just signing up. Its simplified user experience may not suit the seasoned investor, however it’s a great starting point for individuals interested in investing in stocks, ETFs, and even select cryptocurrencies. You can search for stocks, add them to your watchlist, get some general information about the company, such as analyst ratings on the stock (buy, sell, hold), their earnings data from previous quarters, their dividend yield, among other useful numbers to guide your investing decisions. Upgrading to Robinhood Gold for $5 a month gives you access to extending trading hours, real-time market data on order volume, among other features.

Robinhood recently released fractional shares allowing you to invest in any company with as little as $1. Overall, Robinhood is a user-friendly app for those who want to be in full control of their investment strategy. 

Acorns®

If managing your portfolio isn’t for you, Acorns ® may be a more suitable option. Acorns is an app primarily focused on helping you save and grow wealth by investing your spare change. Once you link your bank account, Acorns will track your purchases and round them up to the nearest dollar, depositing $5 worth of spare change at a time. You can set the round up to double, multiply by five, or multiply by ten if you’re interested in stepping up the amount you invest. When you first begin, the app provides you with a questionnaire that helps determine your investment goals and strategy, allowing you to choose a more moderate or aggressive strategy. 

In addition, the app gives you small rewards for making purchases with specific companies, like Walmart, Chevron, Uber, and more. Acorns is a great way to passively invest your spare change.

Stash®

Allowing you to invest with as little as $5, Stash ® is a great app for learning how to invest effectively. Like Robinhood, it allows you to be in control of your investments, however it provides a bit more guidance as you move along by helping you pick your investments based on your goals. The app is filled with articles and tips that help strengthen your investment decisions, also providing themed categories of investments, such as innovation or environment. 

Betterment®

Betterment ® is a leader among robo-advisors, providing value to hands-off investors. The app charges just 0.25% for asset management annually, with no minimum amount to start investing. Betterment takes a traditional approach to investing by diversifying your portfolio based on your decided level of risk tolerance and your goals. They offer more portfolio options than some of the simpler applications, making it a strong tool for individuals who know what they want out of a robo-advisor. It’s generally less expensive than other robo-advisors and uses strong algorithms to manage assets effectively and provide strong returns. 

TD Ameritrade®

If you’re interested in doing more than getting your feet wet, TD Ameritrade ® is an app that borders between being suited for the beginner and intermediate-level investor. The app, offered by one of top US brokerage firms, offers a powerful trading experience, allowing you to customize dashboards and screens, access research and advice, receive market news and alerts, and watch educational videos on investing. It’s definitely more suited for the active investor who wants to make adjustments to their portfolio on a daily or weekly basis. While they previously charged $6.95 per online equity trade, they recently released commission-free trading as well. While it may not be the best place for everyone to start, it’s a great place to consider moving to once you’ve established your investment strategy and are working with a larger portfolio. 

With these apps, investing doesn’t have to be overwhelming. You can invest passively, schedule deposits, invest spare change, or dive in and control your investing destiny – whichever feels right for you. You should always use caution when investing your hard-earned money, however, getting started with a few dollars now and learning the ropes could be worth something to you in the future. We hope that at least one of these apps provides you with value and helps you get started in your investment journey.

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