Many people are interested in trading in stocks and bonds. For many people, there is one huge hurdle. There is not enough money in the budget to start. I want to assure you that there is a way of getting started. The answer lies in investment apps.
In this article, I will uncover some of the mysteries concerning these tiny programs which can run from your cellphone. It can change you into a stockbroker. Many companies have investment apps, and I hope that you will have more confidence by the time you have finished this review.
See also: Best Short-Term Investments
Table of Contents
Acorns
How does it work?
The Acorns investment app allows you two types of investment products; Core Acorn and Later Acorn. Both options have about 7000 ETFs, which are used to diversify your investment.
- Core – If you want to start investing money for a specific future goal, then the Core Acorn product is for you.
- Later – The Later Acorn product is targeted at individuals looking at investing for their retirement. If you choose this option, the app will even suggest the best IRA account based on your profile.
There are five types of portfolios; viz.,
- Conservative
- Moderately Conservative
- Moderate
- Moderately Aggressive
- Aggressive
The investment portfolios are set up so that as you move from 1 to 5, the degree of risk increases (the chances of losing some money). On the upside, with growth in risk, you have the possibility of earning a higher return on your capital.
Go to: Acorns’ website
Acorns Spend
Acorns Spend two legs where you can get some return on what you spend:
- Money Plus – With this product, you will receive an Acorns debit card. Whenever you use this card to make purchases at a Found Money Partner, you receive discounts that are directed back to your investment portfolios.
- Round-Ups – With Round-Ups, you have the option of linking your banking accounts and PayPal wallet to the Round-Ups option. All purchases are rounded up to the nearest dollar. All of the change which is collected accumulates. As soon as you have $5 in Round-Ups, it is transferred to your investment portfolio.
The app will continuously monitor the progress of your investments. It will even rebalance and change its strategy to give you the best returns at all times. This is done without the need for you to intervene.
What are the fees and costs?
Acorn has two tiers for charging fees:
- Accounts under $5,000 – If your investment falls into this category, you only pay $1 per month.
- Accounts over $5,000 – Once your investment portfolio exceeds the $5,000 threshold, the fees are 0.25% of the total value of your investment portfolio.
Registered students can participate in Acorns free.
Minimum requirements
You do not need to have any money to start investing in Acorn. However, if you participate in Round-Ups, a minimum amount of $5 must be accumulated before it is transferred to your investment portfolio.
You are also welcome to make additions to your portfolios at any time. These one-time additions must be at least $5.
Go to: Acorns’ website
Is it legit and safe?
There are a few indicators that point toward the Acorn app being legitimate.
- Many extremely wealthy people trust Acorn with some of their money.
- The company uses an SIPC insured account for your money.
- The well-known economist, Dr. Harry Markowitz, is at the helm of the development of Acorn investment portfolios.
There have been mixed reports from individual investors regarding their Acorn experience. These sometimes need to be looked at circumspectly as some were responses to blogs about Acorn. Not all comments are always 100% truthful.
Pros and Cons
Pros
- A low initial deposit of $5 is required to start your investment.
- You pay a small fee of $1 if the value of your investment portfolio is under $5,000.
- The system is easy to use.
- The app looks after your money automatically.
Cons
- There are a limited number of account options available to you.
- If you keep to the minimum deposit requirements, it will not be enough for a retirement annuity plan.
- The costs charged on balances of over $5,000 can make significant inroads into your investment portfolio.
See also: Acorns App Full Review
Go to: Acorns’ website
Betterment
How does it work?
Betterment uses a combination of financial investment experts and technology to care for your investment. When you come and see them for the first time, one of their consultants will guide you through the process of getting you started. Once finalized, their technology platform will do the rest for you, without requiring any input from you.
Go to: Betterment’s website
Personalized Advice
One of the first things will be to determine why you want to invest. This is important for setting up an investment portfolio that matches your desired outcomes.
- Savings – The consultant will assist you in setting up a portfolio that will be able to provide you with an envisaged amount to provide a safety net for the future.
- Future Goals – With choice, you are looking at investing money for a specified goal in the future. This includes targets as providing money to buy your dream home or to pay for college or university fees.
- Retirement – This option will set the platform for saving enough money to ensure a regular monthly payout during retirement. The consultant will also advise on which IRA account to go for.
Part of this discussion will assist in setting up the monthly payments which are required. This is based on:
- The period available.
- The amount of cash you would like to receive at the end of the period.
Portfolio
After you have set up time frames, envisaged payout, and goals, it is necessary to look at the diversification of the portfolio. Each portfolio is personalized according to your requirements.
- Stocks and Bonds – Most of your funds will be split and deposited in stock and bonds of US-based companies. The proportions of how the money is divided depending on the risk profile you decide on.
- Risk profile – The risk profile of the investment portfolio depends on some factors. Lower risk portfolios offer a haven for your money, but at a lower return rate. Higher risk portfolios carry a higher risk for your money, and at the same time, it always offers a higher return on your investment.
Technology
Once all of the original discussions and portfolios are set up, the technology leg of the Betterment investment system takes over. This comes with a few definite benefits which you will be able to enjoy.
- Rebalancing of the risk profile – The technology system will always have a handle on your portfolio and will make the necessary adjustments as stocks and bonds change. This is carried out so that your portfolio remains the same risk, even in a changing market.
- Automatic deductions – You will not have to worry about making payments into your investment accounts. This will be done automatically on your behalf.
- Reinvesting of Dividends – Any dividends that are paid out against your portfolio will be reinvested back to your portfolio.
- Low Taxation – The platform will always determine the smallest possible legal tax obligation, making it a tax saver as well.
What are the fees and costs?
The fees depend on the option you ultimately decide on.
- Digital – If you have decided on the digital product range, then the fees are determined as 0.25% per annum of the total value of the portfolio. These fees are payable monthly.
- Premium – Premium product participants are charged 0.4% per annum and is also payable every month.
Minimum requirements
It is possible to start with the digital product without requiring any upfront investment. However, a minimum investment of $100,000 is needed to be on the premium portfolio option.
Go to: Betterment’s website
Is it legit and safe?
Betterment is legitimate as it has over $15 billion assets, which the company manages. There have been questions regarding the safety of its Robo-Adviser (the technology platform).
Pros and Cons
Pros
- They have great strategies for tax saving
- They offer automatic rebalancing so that your portfolio always carries the same risk.
- With their consultants, you can receive personalized service
Cons
- Their products are not very flexible.
- Some companies offer Robo-adviser technology for free.
Go to: Betterment’s website
Ally Invest
How does it work?
The company offers you two options investment paths. You can either take complete control of your investment portfolio or allow Ally to set up a portfolio for you.
Go to: Ally Invest’s website
Self-directed Trading
This option allows you to run your investment portfolio. If you go this route, the company offers you quite a few tools.
- Transferring an existing portfolio – If you have a current portfolio, the company can assist you in moving the portfolio. The whole process can be managed online.
- Tools – As a self-trader, you have full access to the online tools of the company. This is to assist you in running your investment portfolio successfully.
- ETFs which do not charge a commission – As part of this package, the company provides advice on which EFTs to used when putting together your investment portfolio. All of the ETFs do not charge any commission.
Managed Portfolios
This is the option you will choose to have Ally invest your money with a personalized portfolio which the company will handle on your behalf. There are a few essential steps when setting up your investment plan.
- The Investment plan – During this first phase, you will set up your investment plan. Decide on the purpose of the investment and decide on which types of ETFs to use for distributing your funds.
- Customizing the portfolio – The primary purpose of this phase is to put together a portfolio that matches the type of risk profile you want. People who prefer safety ahead of returns will do the lower risk route. If you like to take the risk on the possibility of getting higher yields, then there are the high-risk portfolios.
- Tracking the process – As the holder of an Ally managed-portfolio, you also have access to the online tracking tool. This allows you to see how your investment is doing at any given time.
- 24/7 support – You also have access to the Ally support line 24/7.
What are the fees and costs?
For the self-trading option, there is a standard cost of $4.95 with no minimum balance or $3.95 with a minimum balance of $100,000. Then are a variety of investment options, each carrying a different price tag.
The company charges you an annual fee, which is calculated as 0.3% of the total value of your portfolio if you go with the Ally managed-portfolio option.
Minimum requirements
There are no minimums with the self-trading option. However, a minimum investment of $2,500 is required to open a managed-portfolio account.
Go to: Ally Invest’s website
Is it legit and safe?
Ally Invest is a legitimate investment company offering individuals entry into the system without any minimum balance. Unfortunately, this does impact on people with substantial amounts of money to invest. This is because of the reduced earning power of their investments.
Pros and Cons
Pros
- They have an extremely competitive fee structure.
- The platform offers a range of investing options.
- You also have access to Ally bank.
- Ally offers a 24/7 support service.
Cons
- The transfer of funds can be slow
- Ally Invest does not have any local branches
Go to: Ally Invest’s website
Swell Investing
UPDATE: Swell Investing is closed!
How does it work?
The Swell approach is unique in that instead of setting up portfolios consisting of a mixture of stocks and bonds, and they invest in companies that are run along with strong green sustainability principles. All of the companies are on the sustainability list of the United List.
Investments
When you approach Swell as an investment partner, your portfolio is created by buying shares in the Impact400 companies. Each of these companies practices one or more of the following sustainability policies:
- Zero Waste
- Clean water
- Disease eradication
- Healthy living
- Green-tech renewable energy
Portfolios
As a portfolio owner, you have shares in the companies which are part of your portfolio. The company does provide portfolio experts to assist with the creation of your portfolio. You also have input and can decide if you want a specific green company as part of your portfolio or not.
Other benefits Swell portfolio participants can tap into include:
- Tax optimization
- Automatic deposits into their portfolio accounts
- Automatic dividend reinvestment
You can participate in two types of investment portfolios.
- Flexible accounts – Where the focus is on providing funding for future personal goals.
- Retirement IRAs – There are a few options that you can choose from: Traditional IRA, Roth IRA, SEP IRA.
What are the fees and costs?
Swell has a one-price approach of 0.75% per annum of the total value of your portfolio.
Minimum requirements
A minimum investment of $50 is required to start your investment plan with Swell.
Is it legit and safe?
Swell is a legitimate investment company under the wing of Pacific Life. The parent company has been in existence for the past 150 years.
Sewell is not always a haven for your money as the companies in your portfolio are often volatile, which can put your money at risk.
Pros and Cons
Pros
- Serves a dual purpose in allowing participants to invest as well as contribute to social welfare at the same time.
- There is no expense ratio.
Cons
- The portfolios are incredibly volatile.
- Low level of diversification of portfolios.
Stash Invest
How does it work?
Stash invests users to provide an app that you can use to buy stocks and bonds to build your portfolio.
Go to: Stash Invest’s website
The system guides the purchasing of stocks, bonds, and ETFs. As your personal portfolio builder, you can get assistance from Stash in two ways:
- Coaching Tool – This tool is designed to guide you through the full process of creating your portfolio.
- Education Tool – The education tool gives you access to some useful tips and articles about investments and portfolio creation.
Another product from Stash also links to your portfolio as a unique savings option. This is based on using a special Stash debit card. Every time you use your card at an accredited store, you accumulate points which are converted to cash, which can be transferred to your investment portfolio.
What are the fees and costs?
You are allowed an unlimited number of trades and access to Stash education for only $1 per month as long as your balance is below $5,000. As soon as your worth exceeds the $5,000 limit, the charge is 0.25% per annum on the value of your portfolio.
If you are managing a retirement portfolio, the cost is $2 per month if your balance is below $5,000.
Minimum requirements
You are required to make an initial investment of $5 to start creating a portfolio with Stash.
Go to: Stash Invest’s website
Is it legit and safe?
Stash is a legitimate app that new investors can use to start in the investment world with a small deposit of $5. It is challenging to analyze the safety aspects of Stash as it has only been in existence for about three years, which is too short for an accurate review.
Pros and Cons
Pros
- Easy to invest with Stash.
- ETFs are easy to understand.
- The availability of easy to understand snapshots of your account.
- Low minimum balance.
Cons
- Any income generated with Stash is taxable as any other investment.
- Costly for small accounts.
Go to: Stash Invest’s website
Investment Apps FAQ
How do they work?
Once you have your app installed, choose the investment option you want, make the required minimum deposit, and you are ready to go.
What are investment apps?
Investment apps make it possible to set up investment portfolios and trade on the markets from your cellphone, without the need for a physical stock or investment broker.
What are some of the advantages of an investment app?
One of the most significant advantages is that it is an excellent platform for starting as it usually requires no minimum deposit or a minimal deposit in some cases.
How to start?
Each company has an app. Choose the app which works with your cellphone, install and get ready to begin trading.
What about my portfolio risk analysis?
The app would usually choose a portfolio based on the answers you provide to specific questions. Once the risk factor of your portfolio has been established, the app will rebalance your portfolio so that you maintain the same risk factor.
What kinds of Investment portfolios can you create with an investment app?
It is possible to have a simple savings account, a portfolio to provide a financial safety net, a portfolio to save money for a specific long term goal. It is even possible to start an IRA plan from an investment app.
Do investment apps offer user support?
The answer to this is yes. In some cases, the support will be offered by the app. There are even some company apps that will allow you to interface with a physical support officer online.
Conclusion
I sincerely hope that you have enjoyed this epic journey with me in uncovering some of the mysteries surrounding investment application apps. The primary purpose was to educate and teach, the same way that you can learn about big advisor firms through analyzing their investments. There are many things out there which are unclear at first until it has been explained.
I have shared some secrets, inside information and even looked at some pros and cons of each of the products discussed in this article. This should give you the confidence to make a choice based on the facts uncovered here.
Now it is up to you if you want to take the plunge or not.
