Starting an investment portfolio has never been as easy as it is today. As more and more companies are offering investors with many different alternatives that make investing a simple and attainable task.
Smartphones have been a key element for this growing sector, as it has offered brokers a powerful tool to base their applications around. It is incredible to see how multi-million transactions can be executed in real time from the palm of someone’s hand, effectively making the financial markets accessible to anyone.
In the past, owning a brokers account and investing in stocks and other assets used to be very expensive due to all the fees and commissions involved. Nowadays you can even find brokers offering zero fee and commission trading which effectively makes Stock investing free.
There is such a wide variety of services and apps offered to the public that it is highly probable for a new investor to find an option that will meet their expectations and their investing necessities
A perfect example is all the new apps that are specifically designed for beginner investors and for passive investment. Many of these brokers offer to manage an individual portfolio making it completely hands-free.
These are some of the best investment apps currently available in the market today. In this list, you find applications for both beginner and mid-experienced investors.
Best Investment Apps of 2019:
The company is seen by many as a modern response to investing, designed to be efficient, simple and friendly to any new investor/trader. In essence, the company modernized the old-school practice of saving the loose change, this time allowing investors to round up each purchase made with a credit or debit card to the next dollar, automatically investing the difference into a diversified ETF portfolio
Although these roundups are the bread and butter of the platform, the system is open for investors to do lump sums investments manually or set up recurring deposits on a daily, weekly or monthly basis. Lump-sum transfers can be as small as $5.
While Acorns holds a broker license in the US, it is important for investors to understand that the company does not offer a regular brokerage service. Acorns business model was designed for individuals who are looking to get started into the investment world but that required assistance with the management of their portfolio.
In order to continue with the overall tailor-made experience, Acorns offer 5 portfolio models to choose, each of them offering a gradually higher level of risk, allowing both conservative and aggressive investors to manage risk according to their profile and goals.
All portfolios offered by Acorns are put together and managed by The Vanguard Group and Blackrock, which provides another extra benefit of choosing the application over its major competitors.
Just like with any mutual fund, all the portfolios are recalibrated as market conditions changes, this in order to deliver smooth returns over time and to mitigate any volatility that could be affecting any component of the portfolio.
Acorns smart portfolio algorithms automatically work in the background of life, helping users build wealth naturally, pennies at a time.
2. Fidelity Investments
Commonly referred to as Fidelity, is a multinational company that focuses on financial and investment services worldwide. With more than $2.46 Trillion in assets under management, Fidelity is a giant with 75 years of experience in the financial markets.
Fidelity offers almost every type of asset class and security that is publicly traded in the major US exchanges and also on the OTC Market, allowing investors to reach a wide range of assets.
If you are interested in the US markets, you should consider fidelity as they offer other products besides brokerage, making it a full package for international and local investors. Some of the complementary services are:
- Cash Management
- Derivatives Products
- Active Portfolio Management
Fidelity might not be the cheapest option but it delivers access for both active and passive investors, making it a well balanced and safe option.
3. Interacting Brokers
Interactive Brokers have been a synonym with performance for decades, mainly because of the many many institutional players and even hedge funds that use their platform for their everyday business.
The company works as a prime broker, essentially allowing investors to trade/invest in almost every type of asset class publicly traded in the global markets. This makes them a weapon of choice by investors of all sizes. For several years the company has been working to renovate their business model, making their platform more accessible for retail investors.
Due to the increase in new retail accounts, the firm has invested in the development of a very detailed and extensive educational library and its own dashboard for analysis sharing between investors and traders.
Nowadays more and more individuals are interested in managing their own investments and portfolios, while Interactive Brokers might not be the friendliest app available it can easily become a cornerstone for any investor who is looking for the next step in their career.
Over the last 20 years, the most important tech companies in the world have walked out of Silicon Valley, and Robinhood is no exception. The California based broker, offers its services via a proprietary smartphone app (one of the best available in the market), allowing individuals to easily invest in publicly traded companies and ETFs listed on the major U.S. Stock Exchanges.
The most impressive thing out of Robinhood is that there are no fees for stock trading, making it one of the only few commission free brokers available in the US.
Robinhood does not offer technical analysis on the charts, making it a nightmare for anyone with a strategy that relies on many indicators in order to invest/trade. The app follows a minimalistic approach which intends to simplify investing into long term holding and stock/ETF ownership.
Much like American banks represented the old financial America, Robinhood is seen by many as the millennial response to investing and to the overall stock market, an example of this is the “free” share you receive after you open your first account, a single random share of a publicly traded company in the US.
For anyone interested in investing and starting their way into the world of stock trading, Robinhood offers an elegant, minimalistic, and safe app for beginner investors.
With a $5.6 Billion valuation, the company is expected to go public at some point during this year.
5. Thinkorswim (TD Ameritrade)
The Thinkorswim platform was created in the late nineties by Tom Sosnoff, a veteran investor and trader who believed that the investing in stocks and derivative instruments could become popular to retail investors with the help of a completely dedicated software.
After a decade of its founding, Thinkorswim was sold to TD Ameritrade. Officially becoming the spearhead over which the broker was renewed. TD Ameritrade is one of the most important brokers in the US, with total assets exceeding $1 Trillion in more than 11 million client accounts.
TD Ameritrade differentiate themselves from the rest of the brokers available globally because of their app and the fact that they are a multinational group that offers its clients with multiple other services besides investing. Some of them are :
- Life Insurance
- Retirement and Wealth Management
- Commercial Banking
- Auto Financing
- Direct Investing
- Active Portfolio Management
Technical and fundamental analysis are the two elements over which most investors develop their strategies, and structure their portfolios. Thinkorswim exceeds expectations with a swiss knife application that not only is powerful but is also intuitive and friendly to all investors.
If you have used a Bloomberg Terminal in the past, you will find yourself close to home with Thinkorswim. On the other hand, if you have never been close to a terminal it might take you some time to understand how to use it, but it is definitely not difficult.
In order to mitigate the impact on new users, the firm offers a vast library of educational content which makes it even easier for new users.
This is another app with a very unique and disruptive model, as it offers investors the ability to buy fractions of a share instead of the complete unit. While this practice might seem odd, it is actually very useful for small investors as it allows them to invest in their preferred stocks based on their buying power.
A perfect example of this would be an investor who wants to buy $500 of Amazon Stock, which is currently trading over $1800 per share. By utilizing Stockpile and investor would be able to buy 27% of an Amazon share, instead of requiring the full money to buy a single share.
Another important aspect of the app is that you can buy gift cards of the major ETFs/stocks, allowing investors to give full stocks or fractions as gifts. This was specially intended to motivate and drive people to start into the investing world.
It is important for investors to understand that even though Stockpile operates as a full broker, it does not offer a regular broker service. For example, if you were to execute a trade, it would take until the end of the day for you to get filled instead of immediately.
For anyone interested in starting their investing career and a long term stock/ETF portfolio, Stockpile is a strong and cost-efficient option.
Nowadays more individuals are interested in investing, but many remain hesitant as they don’t know where or how to start. Stash is a broker that follows a similar strategy to Acorns. Focusing on new investors with no experience at all. The company has a minimalistic platform that was designed for nonfinancial individuals and especially those looking to start their own passive investment portfolio.
While the company operates under a broker license in the US, they lack by choice of many of the elemental services provided by regular brokers. This is with the intention of keeping the platform as minimalistic and simple as possible.
Even though passive investment is the key target for Stash, the company still does not offer a Robo-Advisor service. Instead, the company provides guidance to its investors during the investment selecting process and portfolio management. This makes the process completely personal and self-sufficient.
New investors usually tend to lean toward platforms that look more sophisticated and that offer a higher detail of analysis and technical tools. Although these types of tools are necessary for active investors, they will probably only complicate the overall experience for someone new to the market.
If you are interested in simplicity and straightforward service to invest in diversified portfolios, then Stash is a strong player to look after.
If you don’t feel comfortable with managing a portfolio on your own then Acorns might be a better option to start.
TradeStation is a top-notch option platform that covers most of the necessities a trader might have. Even though the firm started as a broker focused only on institutional and heavy players, the company has changed its model allowing retail investors to gain access to their state of the art service.
The company offers access to the major financial markets and asset classes in the world, allowing investors to diversify into other markets besides the US.
Investors should keep in mind that TradeStation does not offer portfolio management services, leaving investors under their own management and execution.
While their mobile platform is great, it is definitely not as good as their desktop software. If you are planning on executing transactions from your smartphone on a regular basis, I would recommend going for a Thinkorswim account instead.
TS is not an expensive option when it comes to fees and commissions from trading, but the company charges some very pricey fees for live data packages depending on the market. A retail account with full access to major exchanges and asset classes, plus OTC market could easily run towards the $150 per month.
Etrade might not be the biggest broker form this list, but with more than $346 billion in assets under management, it can not be considered small either.
The firm currently offers three apps that are available for all the investors:
- E-Trade Web: This application offers free streaming of market data and real-time quotes as well as market commentary and research.
- E-Trade Pro: Impressive desktop application with ideas-generating tools and strategy backtesting capabilities
- Power E-Trade: Best for active traders and those focused on technical analysis of the market
The three apps are available for all users but its use will depend on the specific necessities of each trader and their portfolio.
For many relatively new investors, educational and research material is key to continue learning and developing their careers, E-Trade is known between markets as a heavy spender of these two resources.
Betterment is not a broker but the company offers its services as an online financial advisor and portfolio manager. With more than ten years of service, the company has proven to be a reliable option for anyone looking to passively profit from the markets and to pass the responsibility of managing the portfolio to a third party.
An important characteristic to mentioned about Betterment is that any investor with an account under $100k won’t have access to investing in single stocks and instead would have to go for specific ETFs that deliver a more robust return at a smaller unit of risk.
BlackRock Income Portfolio
Over the past couple of years, Betterment has worked in a joint venture with the giant asset manager BlackRock, to design a low-risk high dividend portfolio specially developed to generate income.
This portfolio has become a solid option for retirees looking to receive stable, income as well as a method to preserve their capital.
As of January 2019, the company had +$115 Billion in asset under management and more than 400,000 active users worldwide, making it one of the most important and fully automated advisors worldwide.
Frequently Asked Questions
Most of the new modern brokers have lowered their minimum investment required to start, making investing more accessible for any individuals. In this list, there are options that would rank from $5 up to $2000 which covers most profiles. A common misconception that many new investors have is that in order to start investing they need a lot of capital and this is as furder as it can be from the truth.
Applications like Acorns allow investors to start building a portfolio pennies at a time, this might not sound much but with an average return of 10% a year in the stock market and with an interest compounding formula, in the long run, this practice can help to achieve anyone’s goals.
The sooner you start the better the returns you will have as time plays an important role.
Nowadays stock trading has become pretty standard in terms of applications, some might be more fancy and sophisticated but they all follow the same model. The real question before choosing the best option would be to understand the knowledge level you have and also what time for investing you are planning on pursuing?
If you are planning on active trading then a broker with technical analysis like Interactive Brokers or Etrade would be a good choice.
There are many different apps available for beginner investors, it is important to understand how friendly their platform is but also their overall service.
The firm provides access to the major asset classes in the world and to an experienced list of profitable investors you can follow. You want a broker and its app to be simple but at the same to offer you everything you will need to continue growing in your career.
For anyone looking for passive investment, Fidelity is a good option as it provides other financial services like cash management and even credit cards that use your investments as collateral.
A cheaper option could be Robinhood with its free trading scheme.
Active traders require fast execution and access to news and indicators in time, while there are many different apps available the best two options are:
- Thinkorswim (TD Ameritrade) : Best mobile application and overall environment
- TradeStation: Best financial indicators and technical analysis
The asset range varies from app to app but the most commonly traded assets available are:
The brokerage business has changed dramatically in the past decade and most probably will continue improving as new technology become available to the overall market.
Any new investors must keep in mind that there are many different types of brokers available today, they should take their time to review and understand the quirks and features of everyone before committing.
With such a wide range of options to choose from, it’s pretty possible that you will find the broker and app that will suit your necessities at its best. New investors tend to commit the error for looking for very high-end platforms that emulate what hedge funds use but in reality, this is only going to cause more stress as they are more complicated.
For any new investor looking to venture in the markets, I would suggest looking for a broker that focuses on delivering a simple layout and that provides educational material and analysis. This is what will ultimately boost a trader to grow and what will pay overtime.