A new mutual funds investor must decide between passive or active management, stick to a plan, understand fees and choose where to buy funds. Would you like to mimic the market or try and beat it? This is not a difficult decision to make. One approach is more expensive than the other and does not necessarily offer better results. Actively managed funds are those that are managed by professional managers.
These managers research and buy with a goal of beating the market. There are fund managers that have done this successfully over the short term. However, it is not easy to outperform the market regularly over the long term. Because of the involved human touch, these funds cost more.
Passive investing is simpler and often delivers better results. Many people opt for passive investing because there are fewer fees involved and it is cheaper. The index fund is the most common passive investment.
Patience pays; have this in mind when considering your budget. To be on the safe side, make sure that you can leave the amount you have decided untouched for five years or more. These questions should help you as you come up with a budget: How much do you need to begin?
Mutual fund providers always have a minimum amount set. It is the least amount you can open an account with and start investing. Other brokers have not set a minimum amount while for others it could be anywhere from $500 to $3000.
How should you invest the money? What should you settle on as your initial mix of funds? Older investors should not ride out risky bets because they are closer to retirement age. Stocks require that you have a brokerage account, but mutual funds give several options.
If you contribute to a 401(k) or any other employer-sponsored retirement account, you are probably already investing in mutual funds. Another alternative is to purchase the fund directly from the company that created it such as BlackRock Funds or Vanguard. A wise idea would be to look for an online brokerage and buy from them. Many of them offer a wide selection of mutual funds. If you opt for a broker, consider the following:
- Fund choices
- Educational and research tools
- Ease of use
Understand and Analyze Fees
Active vs Passive: actively managed accounts offer great services, but the cost is also high.
Regardless, companies charge you an annual fund management fee, among other costs related to running the fund. This fee is usually a percentage of your invested cash and is called the expense ratio. It is difficult to determine these fees upfront, but you should at least try to understand them because they can greatly reduce your returns over time.
Mutual funds do not usually have commissions, but transaction fees may be involved. There is also a sales load. After determining your preferred mutual funds, start thinking about managing your investment. It would be wise to rebalance your portfolio yearly so that you can keep it in line with your plan of diversification. Another thing is, try to stick to a plan and do not chase performance. Always remember that, “past performance is no guarantee of future performance.”
When it comes to choosing mutual funds for your investment portfolio, you have so many options and this can be overwhelming. Every investor’s situation is different, but it is always a wise decision to go with funds whose investment strategy you understand and those that are compatible with your portfolio. Another good idea is to be up to par on the fees you must pay and the overall quality of the fund.
Before you start buying shares, consider your reasons for investing. Do you have financial goals? Are you looking for a current income or long-term capital gains? When you have clear goals, it becomes easier to choose the right fund to help you achieve that goal. For instance, money market funds are the best for short-term goals. Bond funds are great for goals to be achieved in a few years.
If your goals are long-term, stock funds may suit you just fine. Another thing to consider is risk tolerance. Will you be okay will dramatic swings or are you looking for a conservative investment? For the former, stock funds may be a better choice for you while for the latter, you may want to investigate bond funds.
You should also ask yourself this question, “do you care more about outperforming the benchmark index of your fund or does your investments’ cost matter more?” Index funds are the way to go if you answered, “cost”.
Finally, consider the amount you have available for investing, how you should invest it and taxes. The internet makes it so easy to find funds. Most mutual fund companies now have websites and you can always Google search a specific fund family or fund. If you still have not decided on a fund company, search for specific terms based on your preferences.
There are many online services that will help you identify different possibilities.
- Kiplinger and Morningstar
Brokerages are also great sources of information and they offer guides. You can buy mutual funds through financial planners, banks, a broker, or insurance agents. You will be required to pay a load (commission fee). Some companies allow you to buy their mutual funds directly from them—most no-load funds are bought directly.
You can buy no-load funds from brokers as well. Mutual funds can be bought through no- or low- transaction free programs. These programs (sometimes called fund supermarkets) usually provide multiple funds from various companies. They offer consolidated record keeping which includes all the sales they have made.
Fidelity’s FundNetwork, Vanguard’s FundAccess, and Schwab’s OneSource are good examples of these programs. Once you know the fund you want to purchase, look at the price. Many shares are priced using their Net Asset Value (NAV); that is, the assets of a fund minus its liabilities. The value of a single share in the fund is the NAV per share. This is the number you will see quoted in newspapers or online.
Mutual funds allow individual or small investors access to portfolios that are professionally managed. Every shareholder proportionally participates in the losses and gains of the fund. Shares (mutual fund units) can be redeemed or purchased at the current NAV (net asset value) per share of the fund. To determine a fund’s NAV, the total value of the securities is divided by the total amount of shares.
A mutual fund is an actual company and an investment. When a mutual fund investor buys shares, he is buying a portion of the mutual fund company and its assets. Mutual funds collect pools of money from investors and use the money to purchase securities such as bonds and stocks. The performance of the securities bought determine the mutual fund company’s value.
Basically, when an investor is buying a mutual fund’s share, they are buying its portfolio’s performance. Mutual funds usually hold many different securities and, therefore, give their shareholders the benefit of diversification at a low price.
Albert Einstein once said there is nothing more powerful than compound interest. Apply that logic to buying a stock in the stock market, and you can double your money in ten years. Further leverage that logic by putting 5% down on a home, and you can possibly multiply your money by four times, eight times… even twelve times in those same ten years!
Let’s say you have $10,000 and want to find the best return for your investment. You can certainly put your money in the stock market, and if your stock goes up by an average of 7% per year, your $10,000 nest-egg will be worth nearly double after 10 years. ($19,472 to be exact.) Not bad for passive income!
However, if you take that same $10,000, and apply it as a down payment toward a 200,000 home that appreciates by half the rate of the stock market (3.5% a year average), your home will be worth over $282,000! Even if you get an interest-only loan, your initial $10,000 investment will be worth over $92,000 after selling the home and paying off your loan! If your home appreciates at the same rate as the stock market (an average of 7% per year), and your initial $10K investment that bought a 200,000 home, will parlay into owning a $384,000 home! Pay off your $190,000 loan, and you’ll be sitting on $194,000 in cash!
If you’re wondering about monthly payments, you have two options: If this is for a home you will live in, the monthly payments will likely be the same as you would be paying in rent anyway, and there are additional tax benefits that haven’t even been discussed in this article. If you buy this property as a rental property, your tenant’s rent payments should more than cover your mortgage payment. (There’s nothing more beautiful than letting someone else pay for your real estate investment. You just can’t do that in the stock market, but it’s done all the time in Real Estate.) If you’re still in doubt, you might want to read a couple other well-known books — “The Wealthy Barber” by David Chilton, “Rich Dad, Poor Dad” by Robert Kiyosaki, or “How to get Rich” by Donald Trump. If you don’t feel like running out and buying a book right now, feel free to listen to a free recording where a Colorado real estate investor shares his secrets to success. Listen to the free recording at: http://www.automatedhomefinder.com/education/investments101.php
Too much risk?
Yes, there is risk, but it is doubtful that your risk is any higher than the risk involved with investing in the stock market in the first place. The higher the risk, the higher the reward, and real estate has been a time-proven investment vehicle for millions of wealthy individuals — Donald Trump, Warren Buffett and David Chilton (“The Wealthy Barber” himself.)
How to get started:
If you’d like to explore the idea of investing in real estate in your area, simply look up a buyer-agent in your area, or start a search on the internet and start a couple real estate searches to see what kind of home you can get in your area. If you’re not sure how much home you can afford, your Realtor can help, or put you in touch with a lender who can.
If you have money that you would like to invest to help grow your overall finances, you might have considered a high interest savings account in a bank, the stock market, bonds, and so forth. Of course, the fastest way to make profit (but also the riskiest) is by using the stock market. It is for this reason that people putting money into stocks should have as much information on them as possible to help them avoid losing it all.
1. How Trades Work on The Stock Market
If you are looking to do just one, or many, trades you will need to get a stockbroker. Brokers can also offer advice about that stocks to trade and the condition of the market. These full-service brokers charge a relatively high commission. To cut costs, many people use discount brokers that charge significantly less. The downside being that you don’t get expert advice, but if you’re willing to forgo that pleasantry you might want to rely on the fact that most brokers will not do a trade that is not profitable.
2. Brokerage Services
Brokers often engage in online trading and can even provide you with assistance for your trades. This is known as broker assisted trading and some brokers offer options like Interactive Voice Response System for placing orders by telephone and wireless trading systems for making orders by using web-enabled cellular phones or other handheld devices. They take their job very seriously and are always connected to be able to make a trade.
3. Track Stock Market Movements
Most brokers will put forth the extra effort to be able to allow their clients to place orders over the internet. Special software may also be available to help clients see charts and graphs. The entire system is password protected and usually doesn’t cost a lot more. This can be very convenient and save you time and money.
4. Stock Orders Also, What They Mean
Market Order – The instruction to buy or sell at the current market price
Stop Order – Instructs the broker to trade at a specific price
Limit Order – Instructs the broker to trade at a given price or better
GTC – This stand for good until cancelled. Your desire to buy or sell will be executed until you say stop.
5. The Stereotypical Trade
Your average trade takes place in something called round lots, multiples of 100. While it’s possible to trade other amounts of stocks, but this kind of trade is called an odd lot. Trading software can handle both types of orders, but odd lot orders are slightly more difficult to fill than the most common trade denomination.
The key to using options to increase your stock market profits is that you must be able to correctly predict both the direction that the stock will move, and the approximate time frame in which the move will take place. If you miscalculate on either of these values, you will either break even, or loose. On the other hand, if you are correct, your profits may well exceed three times the amount you would have made with just a straight investment in the stock.
An option gives the owner the right but not the obligation to purchase something. More specifically, stock options are financial instruments that come in four varieties: Long or Short positions on a Put or Call.
Long means a person purchases a Put or a Call. Short means a person sells or writes a Put or Call. Option writing is a more advanced topic so this course will focus on the more common long or option buying, and the following descriptions assume all positions are long.
A Put is the instrument that profits when the underlying stock declines in price. When the stock goes down, the value of a Put goes up. A Call is the reverse of a Put. The value of a Call goes up when the stock increases in price.
As you can see, if you expect the stock price to go up, you buy a call. If you expect the price to go down, you buy a put. There are two more parts to an option that need to be covered. First is the expiration date.
All options have a date in which they expire or become worthless. Remember that an option gives the owner the right to purchase something. This right is for a limited amount of time. Depending on the stock, different options might be available for several consecutive months into the future, or there may be a couple of months skipped. The specific day of the month that an option expires is always the third Friday of the month, unless it is a holiday, in which case the expiration is on Thursday.
The second element is the strike price. This is the price that the option will be exercised at. Again, an option is the right to buy something, and the price at which something is bought is the strike or exercised price. Depending upon the option, these prices may be incremented by $2.50 up to $10.
This all adds up to a lot of choices when it comes to buying an option. Calls or puts plus different expiration months, and multiple strike prices within each month is a lot of different decisions.
With the abundance of choices, the number of contracts traded for a specific option can be small for a stock that is not particularly popular in the news. This fact my limit your trading opportunities or may result in a large price spread between the bid and ask prices.
If you can identify certain situations that will influence the stock price within a defined time period, you may be able to use stock options to triple your returns. Many investors have found such patterns and are making excellent profits by carefully selecting the right stock options.
Everyone wants to see growth from their stocks. That is why they take their funds from the bank and start investing them. Many first-time investors remove their funds with a feeling of trepidation and anxiety. The stock market is a volatile storm where many drowned.
The first step is to learn how to buy a stock. Many investors jump right in learning investment strategies and adopting techniques that worked for others, before learning the simple steps to buying a stock. Without a good understanding of the rules of buying a stock, it becomes impossible to make the strategies work.
The strategies do work but only when the investor chooses the right stocks for their own portfolios. The strategies do not tell investors what to buy and when to sell. They are only meant to tell investors how to manage their stocks. First, the investor must buy some stocks.
Step #1: Read the Wall Street Journal
The Wall Street Journal is not the only paper that can help investors. The business section of your local paper can often offer tips that will never make it into the Wall Street Journal. However, The Journal can teach new investors the lingo, and the basics of the markets. The more you read, the more familiar the markets become, and the easier it is to research stocks.
Step #2: Pick Industries
No one expects an investor to build a portfolio with a few stocks from mining, a couple from manufacturing, a drug developing company, a foreign natural resource harvester, and a marine biology firm. This is foolish investing. Instead, investors should focus on one or two industries and learn everything they can about that industry.
There are many places to research. Sometimes a simple place like finance.yahoo.com or Morningstar.com can provide all the resources needed to find an industry you will not tire of.
Step #3: Decide How Much to Invest
This is one of the hardest parts of investing. Many people have a set amount to invest. They experience some success and hit pay load. Then the temptation sets in. If they had invested $10 000 instead of $1 000, their payoff would have been 10x higher. What if they had of invested $100 000? This type of thinking is dangerous.
Never invest more than you can lose is a nice mantra, but in the real world, resisting temptation is much harder. As the year’s past, some investors start counting up the intangible money they may have earned if they invested more. This leads to frustration instead of joy when a stock does well.
Eventually, they start investing more than they can afford to lose. Then, they lose it –
Step #4: Avoid the Crowd
Some new investors believe the best way to buy a stock is buy whatever is hot now. They skip through websites and financial papers until they find something that is hot. Unfortunately for them, they have not yet met the Bull or the Bear.
Buying hot stocks is only for people who can determine why that particular stock is hot at the moment. Buying on an impulse or gut feeling is just as dangerous. By the time a stock is hot, the real investors have already bailed, having made their money, and are leaving before the crash.
These four steps will help a new investor buy a stock which should perform well, instead of buying a stock that bottoms out within a few weeks.
Today, many people want to know how to buy stocks to increase their net worth. When it comes to making your purchase, there are several options available today. In the old days, you had to call up your financial advisor or stockbroker and let them place the order for you.
They would then phone in your order to someone on the stock exchange, who would locate a stockholder of that company willing to sell those shares to you. That was then; this is now. Nowadays, you can almost always make the purchase yourself via the internet.
Very simply, today there are many websites that allow active trading for a minimum fee. Keep in mind, however, that for each transaction you pay a fee. Many an investor has lost a great deal of money active trading, by merely being forced to pay a fee for each transaction.
While the fees generally don’t seem like whole lot (1-2% of the total) they can add up in a hurry when you are making a lot of transactions; especially if your investments are losing money or barely breaking even. The best strategy is to only buy a stock when you are sure it’s a sound long term investment. This way, you don’t have to pay the fees associated with active trading, and you also have much less risk from the day to day wild swings of the market.
How can you be sure of its long-term worth? While there are certainly several ways to go about doing this, the essential skill you need to have is knowledge of how to read a financial statement of a company. Very simply, you need to determine how well a company has been doing over the past ten years.
This is probably the most important factor, because if a company has been running profitably for at least ten years (preferably more) they are a good bet to keep doing well. These are usually not the stocks getting all the hype; very simply, most investors like the fly by night companies that have the potential to spring up and make a million bucks overnight. unfortunately, you will most often lose more money with these companies than you will ever make, because of the uncertainty factor.
Of course, you can still go through a traditional stockbroker to make your purchase. Remember that they are paid by commission for each transaction they make.
Often, they will try to encourage you to buy a stock, even if the outlook isn’t particularly profitable, so they can pocket some money for the transaction. Never trust a broker for your financial future; you need to know how to do your own research and determine which stocks are the best pick.
The bottom line is there are several methods for how to buy stocks. You can either invest online or through a broker; but no matter which method you elect to pick, make sure that the company you are investing in has good profits for the foreseeable future.
Avoid active trading when buying stocks, as that can be a very risky proposition. Active trading is like gambling; very few active traders ever win long term investing in stocks this way. Do your research, find the stock that’s right for you, and only then should you worry about how to buy stocks.
Everyone has to stop working at some point in their life. When that time comes, they will have to dig into their retirement savings. Some have enough and can live comfortably; but others are not so lucky.
People now live a little longer and, depending on how long you live, you may need income for 30 or more years. So, how much should a retiree save?
Will $500,000 Be Enough?
To be honest, this would not be enough for many people today. But you can get sufficient income with a good investment portfolio.
Suppose in your first year of retirement you want to earn about $50,000. The average Social Security payment is $17,000. So now you have to earn $33,000 from your $500,000 portfolio.
Another assumption here is that income will increase with inflation and the investment portfolio will, therefore, have to increase. The portfolio should protect your savings and, at the same time, grow at a higher rate than your yearly withdrawals. So be sure to find the proper balance between fixed-income investments and stocks.
Many financial advisors typically recommend the 4% rule to their clients when it comes to withdrawals. According to this guideline, you should never withdraw over 4% of your income in a year.
If you have saved $500,000, you will either have to live on very little or go against the 4% rule.
Here are some possible $500,000 investment portfolios and their potential income.
20% equities, 80% fixed income
- 10% US Equities
- 10% International Equities
- 10% US Treasuries
- 15% Global Bonds
- 15% Corporate Bonds
- 5% TIPS (Treasury Inflation-Protected Securities)
- 10% Mortgage-backed Securities
- 20% Cash and CDs
- 5% Other Bonds
With this example, you will place your portfolio into 80% fixed income and 20% equities.
When you inject that much money into fixed income securities, your portfolio will be protected in the event of a stock market crash. But still, this portfolio may not generate the amount of income you will need as a retiree.
50% equities, 50% fixed income
- 25% U.S Equities
- 25% International Equities
- 20% U.S Treasuries
- 10% Global Bonds
- 10% Corporate Bonds
- 15% Cash and CDs
Half of the funds in fixed income and half in equities would make a better portfolio. This kind of portfolio is likely to generate an average of 8.4% in annual returns over time. That is $42,000 annual income. However, more equity means a higher risk.
40% equities, 60% fixed income
- 20% U.S Equities
- 20% International Equities
- 20% U.S Treasuries
- 20% Global Bonds
- 10% Corporate Bonds
- 10% Cash and CDs
With such a portfolio, principal will be preserved and the portfolio might even grow.
The average annual return would be about 7.8%.
100% Fixed Income
- 20% U.S Treasuries
- 20% Global Bonds
- 15% Corporate Bonds
- 10% (TIPS) Treasury Inflation-Protected Securities
- 10% Mortgage-backed Securities
- 20% Cash and CDs
- 5% Other Bonds
While a portfolio like this is protected from market downturn, its growth may not be enough to offset withdrawals.
Annuities are not for everyone but could be a good option for retirement. You can even get $33,000 annually with less than $500,000.
The Forex market is often more appealing to people that like to live on the edge. There is more uncertainty by far and the rewards of knowing when to buy and sell can be immense.
For those of you who don’t know, the Forex stands for, Foreign Exchange Market. The Forex deals in all different types of currencies and pits them all against each other. For example: the English pound might be worth more than the American dollar but if there is a natural disaster or a nasty political event, then the pound could drop below the value of the American dollar and thus would make money for the individual who had bought the English pound, when they sell.
The people who trade on the Forex market are known as day traders. The reason for this is that the day trader buys at the beginning of the market for that day and then sells off all that he or she had bought by the end of the day. This type of trading is not for the inexperienced. There is potential to make a lot of money on the Forex market, but it takes a person knowledgeable in all the different facets of this slippery exchange to make money. A neophyte to this market can easily be wiped out in a matter of minutes!
The Forex market is also a liquid market with currencies exchanging hands moment to moment. Since transactions are handled electronically around the world, it only takes moments for funds to transfer to different accounts. It is easy to make some trades, watching news events in the country of the currency bought, and then sell it all, in order have money in your bank account by dinner time.
The Forex market is also open twenty-four hours a day since it encompasses the larger markets all over the world. Theoretically, a trader can work all day and all night. This makes the foreign exchange market very popular since people can trade any time they wish. A person can be trading on the Paris exchange until they close at which time the New York exchange is just opening up for the day. There are five major foreign exchange market around the world. They are New York, London, Frankfurt, Paris, Tokyo, and Zurich.
Many people like to invest in the Forex market since there is a lot of leverage available to the day trader. For instance, five thousand dollars can be leveraged to purchase five hundred thousand dollars through margins. What this means is that individual investors can trade with much more money than they actually have. However, one must be careful; it is quite easy to lose the money and thus has to pay much more than is actually in the bank account.
The Forex market is a challenging market to understand and can be hazardous to those not experienced in day trading. Nevertheless, for those who are experienced and can see the patterns of the market, it can be thrilling and extremely lucrative.
There are several strategies that investors can apply in the stock market to make money. One such strategy is purchasing growth stock shares—these are companies whose profits are expected to grow at an above-average pace. If a company keeps this up over the long term, it gets a higher share price and the investors reap big returns via capital appreciation. An investment like this doesn’t come without risk. This is why you should understand the basics and know how to minimize these risks.
If you’re ready, you must be wondering how you can find growth stock worth investing in. Well, check out the methods below.
Growth Stock: Definition
A growth stock is basically a company whose profits are expected to rise at a rate that is higher than average, compared to other businesses in the industry or market. Investors find these stocks appealing because the value of a company, according to Wall Street valuation, is based on a number of its earnings. If a company grows its profits faster, then its share price will also increase quickly. But profit is not the only determinant of success. Other things such as a solid business model and huge market opportunities also come into play.
Where to Find Growth Stocks
Many high-growth stock companies barely existed several decades ago. Today, however, they are household names. Take Ulta Beauty (NASDAQ:ULTA), Netflix (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN) for instance. They were tiny players initially but they managed to rise to the top.
How do you identify such a company while it is still young? The first simple method is assessing your consumer habits. What services or products have you started buying recently but didn’t use them in the past? If you realize that many people are using a new service or product too much, then it’s possible that the company is worth looking into.
Once you identify such a product or service, perform an internet search to see the company behind it. Then assess it a little more to see whether you have a winner.
Macro Societal Trends
A massive change in society usually benefits most growth stocks. If a company can capitalize on these trends, they can enjoy high profits—as long as the trend takes years.
Examples of current macro trends include:
Health and wellness: people are becoming keener about their health and lifestyles.
War on cash: transactions are going cashless globally. Companies like Mastercard and Visa will benefit from this.
Increase in online advertising: Facebook, The Trade Desk and Hubspot are likely to excel from the trend.
The U.S population is growing older: companies that cater for seniors are worth investigating.
Piggyback on Legends
See what money managers are investing in. Not all of them are worth following but here are some well-respected ones.
- Carl Icahn, Icahn Capital Management
- Chuck Akre, Akre Capital Management
- Pat Dorsey, Dorsey Asset Management
Stock Screening Tools
Stock screeners such as Finviz will help you find growth ideas. While using them to find growth stocks, use the traits below:
- Balance sheet
- Projected profit growth
- Sales growth
- Market cap
The stock market can be intimidating for beginners. Stocks are different from certificates of deposit, money market funds, and saving accounts. Their principal value can either fall or rise. Lack of emotional control or sufficient knowledge may see you lose a lot of money. Why Start Now? If you start earlier, you will gain more. Money grows with time. Here are steps to guide you as you begin the journey. Before you invest in anything, it is always important to assess your financial situation and ensure that you can handle the new activity. Consider the following: Employment: your income and job should offer you some sense of security as you start investing. Debt: do not start investing if you have a huge amount of debt. Pay off some of it or all. Family situation: ensure a stable family situation first—one without a sudden change that requires money. Household budget: include your investment ventures in your budget.
Know the reason for investing and determine whether it is for a long-term or short-term goal. Create a cash reserve—not subject to risk of any kind. It should be equal to three or more months’ worth of living expenses. This reserve will come in handy in case of an emergency. It will also help you stay calm if your risky investments drop. With an emergency fund in place, start by investing in a retirement account. This could be an IRA or a 401(k). Retirement accounts make great investments because they are long-term and tax-sheltered. Start Your Investment Journey with a Low-Cost Online Service – Robo advisor services are perfect for investors who are not into DIY. They build an ideal portfolio for you based on your risk tolerance and needs. With an online stockbroker, you will be doing the trading. This means selling, buying, and researching. Start with ETFs (Exchange Traded Funds) or Mutual Funds – Funds are usually professionally managed so stock selection will not be on you. Your only job is to determine the amount of money you would like to invest in a certain fund/group of funds. Mutual fund investing is hassle-free, but you can make it even better with index funds. There is no chance of you outperforming the market. However, you also cannot underperform it.
This is perfect for new investors. Dollar-cost averaging typically means buying into investment positions gradually as opposed to all at once. If you have a certain amount of money for investing, do not pour it all in. Inject it into the fund gradually. Investing in ETFs and mutual funds is safe—even for novices. But to go beyond that, you must learn as much as possible. Read books, the Wall Street Journal, and even take a course. Invest Gradually in Individual Stocks – Dollar-cost averaging is not available for stock investing. You will need to come up with something of your own. Make sure you diversify, never put all your eggs in one basket. Spread out your capital. If you do not understand stock market basics, information on stock trading will not make sense to you. Some phrases such as intraday highs and earnings movers may not mean anything to you and, for the most part, they should not. Long-term investors, especially, do not have to understand these words or even the stock market in general.
But if you plan on trading stocks, understanding the stock market is a must—or at the very least, know the basics. The stock market consists of exchanges, think Nasdaq and the New York Stock Exchange. Stocks are usually listed on an exchange and it is like a market for the stock shares. Sellers and buyers come together to trade. This exchange tracks the price, demand, and supply of the stock. But a stock market is not like any other market. You cannot decide to go and pick whatever shares you want from the shelf.
Brokers represent individual traders. The Nasdaq and NYSE open at 9:30 a.m. and close at 4:00 p.m. Depending on the broker, after-hours and premarket trading sessions are available. Sometimes you will hear people say that the stock market is up or down. They are talking about one of the key market indexes. A market index monitors the performance of a certain group of stocks. The group of stocks represents a sector of the market (e.g. technology) or the whole market. You may have heard of the Dow Jones Industrial Average, Nasdaq composite and the S&P 500 which are commonly used. These indexes are used by investors to benchmark their portfolio’s performance, and sometimes, they help them make trading decisions.
Many investors know to create a diversified portfolio and to hold on to their stocks through thick and thin. Those that involve themselves in stock trading, however, love the action. Trading in stocks means selling and buying frequently to try and time the market. Stock traders seek to benefit from short-term events by buying at a low or selling for profit. Day traders are those that trade several times a day while active traders trade several times a month. These types of traders research extensively and follow the market obsessively. Bull Vs. Bear Markets – neither of these animals are friendly but the bear is the real symbol of fear in the stock market. Bear market: stock prices falling 20%+ across multiple indexes. Bear markets come after bull markets and vice versa. They both indicate the beginning of a bigger economic pattern. In short, a bull market is good news while a bear market is not. Historically, bull markets last way longer than the average bear market. Market Crash Vs Correction – stock market correction: when the market falls by 10%+. Stock market crash: a sudden sharp drop in prices. Do not let a crash worry you. Stock markets will always rise in value. Focus less on the short-term and more on the long-term. Bear markers are unavoidable.
But with diversification, your portfolio is protected from market setbacks. If you begin investing as a teenager, you will have a great financial advantage when you are an adult, even with small returns. Do not let today’s uncertainty and bad news about the stock market stop you. Downturns are normal in the market. What Barriers Should You Expect as an Investing Teen? Before you get too excited and start calling stockbrokers, here is something you should know: teens cannot open their own brokerage accounts. You will come across so many investing apps, such as Robinhood, that make the process easier for teenagers. However, even those require you to be 18 years old. There is nothing anyone can do about this because the restriction is required by law. But it does not mean that you are completely locked out.
You can use a custodial account—have an adult in your life open and maintain it for you. With that type of account, you will be investing through your guardian until you are 21 (or 18 in some states). How Do Custodial Accounts Work? A parent opens the custodial account and gifts money into it. The maximum amount they can give is $15000 (as of 2020). You can then use the money in the account to invest. The parent is the one who will be making the actual trade, though. You cannot contact your account broker and management control only belongs to your parents. Do not be discouraged— you can still be part of the process by choosing investments and asset classes. After a thorough assessment, these are some of the best services offering custodial accounts.
E*TRADE, Ally Invest, and Charles Schwab. Most people choose to invest for the long-term, which is a fantastic idea. You can decide to do that as well and set up a retirement account. Opening one as a teenager means that your money has time to grow. And with compound interest, your funds will keep on accumulating. All you need is an income to contribute to your account. A traditional IRA allows you to contribute a maximum of $5,500 a year as a teenager (as of 2018). These work pretty much like traditional IRAs. The maximum contribution per year is $5,500. The main difference between the two is that Roth contributions are not tax-deductible. You can also withdraw money at any time (after 5 years) and you will not be penalized. Unfortunately, your account is not tax exempt. Your first $1050 income will be tax-free, the next $1050 will be taxed at 10% and anything above $2100 will be taxed at the marginal rate of your parents. What to put in your account? The best thing to do is begin with stocks then dive into low-cost mutual funds. Your parents may say no to a custodial stock account. In that case, see if they will agree to a high-yield savings account.
Online ones are the best and here are some good examples: Capital One, Ally Bank, CIT Bank, Discover, and Navy Federal Credit Union. Hopefully, you already have a checking account. Connect it with a micro savings app. You will be saving and investing anytime you make a purchase. Investing in small-cap stocks can be a smart move for the long-term investor. To optimize their returns, the investor must know when to buy them. Some people are wise and avoid market timing. However, there are tactical and strategic moves they can make to change the fund allocation in small-cap stocks when the opportunity presents itself. There are investors that select an appropriate mutual fund allocation for small-cap stocks and stick to it for the entire period. Occasionally, they rebalance the portfolio; quarterly or annually. Nonetheless, active investors can, in smart ways, alter the exposure of small-cap stock funds for the purpose of improving performance in the long-term. In rising rate environments, small-cap stocks in the U.S have outperformed the large-cap stocks—according to history. These rising rates are observed when the Federal Reserve is no longer reducing interest rates to facilitate the economy or when an economy is starting to recover.
Another time when you should consider buying small-cap stocks is when the market appears to have been down for quite some time. That is, when the market is at a low point and not much optimism left for quite some time. It will not be easy to guess this one correctly but when there is extreme pessimism you can easily feel it and see it on the international and local media. In a growing economy, smaller companies have the potential to rebound faster than the larger ones. Their general fate is not directly tied to economic factors such as interest rates to facilitate their growth. Small companies are like small boats in the water, they can navigate better and move faster than the huge ocean liners. With smaller companies, decisions on new services and products are also implemented faster because their potential obstructions, layers of management, and committees are fewer. Large companies do not have this advantage. When the economy is emerging from recession and experiencing growth, small-cap stocks can respond quicker to this new positive environment and even grow at a faster rate than the large-cap stocks.
Small companies usually raise their capital by selling shares. Large companies, on the other hand, do so by issuing bonds. Because small companies are not really that dependent on bonds when funding projects and expanding operations, high interest rates do not negatively affect their ability to grow. In the years following the 2003 and 2009 recessions, results were mixed. In 2003, small-cap stocks led mid-cap stocks and large-cap stocks. In 2009, the results were different as mid-cap stocks led and small-cap stocks barely won over large-cap stocks. Your takeaway here should be that averages or rules of thumb do not apply all the time. Even after reading about the benefits of small-cap stocks, consider where the information has been sourced from research further on this subject. Investment apps help you manage your investments in the financial market. Most of them offer amazing services at affordable fees, which saves investors a lot of money in the long run. Now you do not have to call your stockbroker to trade. You can do it with a few taps on the screen. All things considered, here are the best investments apps in 2020. Many investors in the U.S are familiar with TD Ameritrade—a large brokerage firm. Its app is the best compared to all others because it has a wide range of options and is great for beginners and pros alike. The default app is ideal for intermediate and beginner traders. The professional level one is more suited for experts.
The benefits you will enjoy including commission-free ETF and stock trades and zero-base fee option trades. Key Features – Name of apps: TD Ameritrade Mobile and thinkorswim. No minimum deposit. Investments types: bonds, mutual funds, ETFs, options, stocks and much more. Account types: different account types including education, retirement and standard. Pros – For experts and beginners. Advanced trading platforms have no extra fees. Cons – Schwab is acquiring TD Ameritrade. Fidelity: Runner-Up – This one offers extensive resources for investors with long-term goals. The mobile app can be used with Google Assistant and Apple Watch. Key Features – Name of app: Fidelity Investments. No minimum deposit. Investment types: fractional share investing, mutual funds, ETFs, stocks, etc. Account types: education accounts, retirement, brokerage, etc. Pros – Fractional share investing. Lots of mobile app features. Most account types are supported. Cons – Phone trades are charged a $12.95 fee. Ally: Suitable for Beginners. The platform is easy to use, and they do not have a minimum required balance. Key Features – Name of app: Ally.
No minimum deposit. Investment types: mutual funds, bonds, options, ETFs, stocks, etc. Account types: self-directed and managed portfolios. No physical location. Pros – Investing and banking in one app. Forex trading app. Cons – Limited features on mobile app. Webull: Best Free. This one is relatively new, but its mobile app is nothing short of impressive. Key Features – Name of app: Webull: Stocks, Options & ETFs. No minimum deposit. Investment types: cryptocurrencies, options, ETFs, and stocks. Account types: IRA and brokerage accounts. Pros – Community area. Paper trading. Advanced charting features. Cons – Additional subscription for real-time data streams. Limited investment types. Acorns: Ideal for Automated Investment. Acorns is fun to use but its fees are a bit high. Key Features – Name of app: Acorns: Invest Spare Change. No minimum deposit. Investment types: bond ETF and stock fractional share investing. Account types: checking accounts, retirement, robo-advisor brokerage. Pros – Simple, automated micro-investing. Gamified app experience
Cons – Monthly fee for all accounts. SoFi: Ideal for Learning. If you want to start small and have access to investment education, try SoFi. Key Features – Name of app: SoFi Invest Money & Buy Crypto. $1 minimum deposit. Investment types: cryptocurrencies, ETFs, and stocks. Account types: cryptocurrency, retirement, and self-directed and managed portfolios. Pros – Fractional share investing. Member events. Cons – Lack of advanced research tools. Limited investment assets.
You know what’s cool? Not just being worth over $1 billion, but saving your customers $1 billion. Today, zero-fee stock trading app Robinhood announced that it’s hit 3 million registered accounts, $100 billion transacted in its app, and $1 billion in saved commissions considering competitors like E*Trade cost $7 per trade.
And now, Robinhood is getting a web version where beyond swapping stocks, you can research them with its financial news feed, check analyst buy-sell ratings, and compare them with its playlist-style Collections.
Long-standing competitors like Scottrade might cram a ton of data onto a web page, but that doesn’t necessarily teach you financial literacy. That’s something Robinhood users need as half of them are first-time traders. Co-founder Baiju Bhatt tells me “If the goal is to actually make people learn about investing, get better at it, be informed, I think our approach is the best one out there.”
Robinhood’s $110 million raise at a $1.3 billion valuation from April has clearly been put to swift use. But the web launch actually harkens back to Robinhood’s original mission. Back in 2013 before it raised its seed round with the intention of letting you trade stocks for free, Robinhood wanted to be a crowdsourced investment advice platform. With the new features like the ability to see the average price Robinhood users paid for a stock and whether its popular on the app, Robinhood is starting back down the path to social fintech.
Cannabis, grass, marijuana, pot, weed. Whatever you want to call it, many cannabis industry stocks are red-hot. Several companies are racing to serve the medical cannabis markets in countries across the world. Some are targeting the recreational market. Others are developing cannabinoid drugs. And that presents opportunities for investors.
The bad news, though, is that many cannabis stocks aren’t good alternatives. They’re either ultra-risky penny stocks or in danger of negative consequences from a crackdown by the U.S. government, which still outlaws the use and sale of cannabis products. However, some stocks are worthy of investors’ attention. Here’s why Aurora Cannabis (NASDAQOTH:ACBFF), Canopy Growth (NASDAQOTH:TWMJF), GW Pharmaceuticals (NASDAQ:GWPH), Insys Pharmaceuticals (NASDAQ:INSY), and MedReleaf (NASDAQOTH:MEDFF) are top cannabis stocks to consider buying now.
Aurora Cannabis ranks as one of the biggest suppliers of medical cannabis in Canada. The company also is moving forward to provide medical cannabis in Australia and Germany, with an eye toward further international expansion.
It’s been a fantastic year for Aurora Cannabis stock so far in 2017. Shares have soared over 260% year to date. This momentum has been fueled by three key factors. First, the medical cannabis market in Canada has grown tremendously. In its last quarter, Aurora reported year-over-year revenue growth of 39%. Second, like its peers, Aurora eagerly anticipates legalization of recreational marijuana in Canada next year. This presents a huge additional market for the company.
Another major reason behind Aurora’s phenomenal rise is the company’s acquisition strategy. Aurora recently launched an attempt to acquire smaller marijuana grower CanniMed Therapeutics. If the deal goes through, the combined companies would have five cultivation facilities (and more coming) with the capacity to produce 130,000 kilograms of cannabis each year.
It’s a similar story for Canopy Growth. The company currently stands as the No. 1 medical cannabis provider in Canada in revenue and market cap. Canopy Growth has also aggressively expanded internationally, with subsidiaries or partners in Australia, Brazil, Chile, Denmark, Germany, Jamaica, and Spain.
Like Aurora Cannabis, Canopy Growth has enjoyed a tremendous year. The stock is up nearly 120% so far in 2017. Strong sales growth of medical cannabis was a big reason for this impressive performance. Canopy reported its revenue in the last quarter more than doubled that of the prior-year period. The company is poised for even greater growth with the legalization of the recreational use of marijuana in Canada in 2018.
Major alcoholic beverage maker Constellation Brands announced in October that it was buying a 9.9% stake in Canopy Growth for $245 million. Constellation is also partnering with Canopy to market a cannabis-infused beer. This endorsement by a huge company gives Canopy Growth a stamp of approval that no other cannabis stock currently has, which should make Canopy Growth especially intriguing to investors.
GW Pharmaceuticals ranks as the largest pure-play cannabis stock, with a market cap of over $3 billion. The biotech focuses on development of cannabinoids and recently completed its submission for U.S. regulatory approval of cannabidiol drug Epidiolex.
It’s been a topsy-turvy year for GW Pharmaceuticals stock. The biotech’s share price has swung up and down by double-digit percentages several times, but is now up over 10% for the year. Some of this volatility stemmed from the potential for another drug to become a threat to Epidiolex.
Still, the chances of approval for Epidiolex in the treatment of Dravet syndrome and Lennox-Gastaut syndrome (LGS) appear to be pretty good. GW conducted three late-stage clinical studies, all of which showed solid efficacy for the company’s lead product. And although there are some drug-drug interactions with Epidiolex, I suspect that they will probably be addressed on the product label rather than holding up approval.
Assuming it does win approval, Epidiolex should succeed commercially. It’s hard to accurately predict peak annual sales for the drug, but somewhere in the ballpark of $800 million to $1 billion doesn’t seem out of the question. Based on an optimistic view of the biotech’s prospects, GW Pharmaceuticals stock should have plenty of room to go higher.
Insys Pharmaceuticals is something of an oddball in this group of cannabis stocks. Like GW Pharmaceuticals, Insys is a biotech with a focus on cannabinoid drugs. However, unlike all of the others on the list, Insys stock has tanked in 2017. Shares are down more than 40% year to date.
What’s behind this huge plunge — and why should investors still consider Insys? First, the bad news. Sales for Insys’ current lead product, Subsys, continue to fall in the midst of national concerns about the opioid epidemic. Insys’ founder (who is no longer with the company) was arrested on charges related to past marketing practices for Subsys. And Insys is itself the target of federal and state probes into its marketing of Subsys.
Better news could be in store for Insys, though. The stock appears to have hit bottom. Even a big third-quarter earnings miss didn’t affect the share price much. Insys expects Subsys sales to stabilize. The company recently launched cannabinoid drug Syndros and thinks sales will slowly grow until they reach around $200 million annually. Insys is also working to settle the investigations into its past marketing practices and appears to have gotten its house in order. With a market cap of less than $400 million, any positive developments could lead to a huge rebound for this beaten-down cannabis stock.
MedReleaf is yet another Canadian medical cannabis stock to keep your eye on. It has the second-highest sales and the fourth-highest market cap among the medical cannabis stocks. MedReleaf stock is also one of the newest on the market, with the company conducting its initial public offering in June.
While MedReleaf stock’s performance so far in 2017 lags behind Aurora Cannabis and Canopy Growth, year-to-date gains of nearly 90% aren’t bad at all. The company’s sales growth hasn’t been at the level of its peers, in part due to reliance on sales of dried cannabis, which isn’t as lucrative as cannabidiol (CBD) products. MedReleaf has taken steps to shift more toward CBD, though.
All of the positive dynamics going for Aurora and Canopy Growth also apply to MedReleaf. Medical cannabis markets are growing across the world. Canadian legalization of recreational cannabis should be just around the corner. And if other large beverage companies decide to follow Constellation Brands’ lead, MedReleaf could be an attractive partner.
I think all five of these cannabis stocks should beat the market in 2018. However, definitely consider carefully before jumping aboard any of them.
All three of the Canadian cannabis stocks are priced at astronomical levels based on their current sales. While they should enjoy tremendous growth, any delays in legalization of recreational marijuana in Canada would hurt in a major way.
The two biotechs, GW Pharmaceuticals and Insys, face different risks. It’s possible that Epidiolex fails to win approval. If that happens, GW stock will no doubt crater. Insys could be required to pay a much larger amount to settle with the U.S. Department of Justice than expected. There’s also a chance that Subsys sales won’t stabilize.
Investing in anything comes down to risks versus rewards. The potential rewards of buying these cannabis stocks are high, in my view. But so are the risks.
Newly released! 10 stocks we like better than Canopy Growth Corporation
On December 1, investing geniuses David and Tom Gardner revealed what they believe are the ten best stocks for investors to buy right now… and Canopy Growth Corporation wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
Like a fine wine or a family heirloom, the best stocks only get better with age. Investing in great companies will build wealth over the long run that you can pass down to your children and grandchildren. After all, many of today’s most valuable companies were just starting up a generation or two ago, so tomorrow’s titans of industry are available on the cheap today. If you’re looking for stocks that could one day make your children rich, take a look at these three recommendations from three of our Motley Fool investors: Netflix (NASDAQ:NFLX), Electronic Arts (NASDAQ:EA), and Vail Resorts (NYSE:MTN)
The one that started it all
Danny Vena (Netflix): Just 10 years ago, it would have been difficult to imagine the changes that would occur in media consumption over the coming decade, and the birth of streaming has changed the entertainment landscape forever. Netflix started it all, and its investors have been richly rewarded — and I think it’s just the beginning.
Netflix began its international expansion with Canada in 2010. The real revolution, however, happened in 2016 when the company announced its expansion to 130 additional countries simultaneously, growing its worldwide total to over 190 countries and becoming a global media empire in the process.
In Netflix’s most recent quarter, global revenue increased to $2.985 billion, up 30% year over year, while net income reached $130 million, more than double the $52 million achieved during the prior-year period. That wouldn’t have been possible without solid customer growth, which continued unabated to 109.25 million total subscribers, up 26% year over year.
The solid growth in new viewers was the result of a continued push for quality content. Netflix dominated this year’s Emmy awards, scoring 91 nominations and 20 awards — more than any other network with the exception of HBO. This is a stunning achievement, considering the streaming giant released its first original series only four years ago.
The key to Netflix’s future will be to succeed internationally, but significant penetration in early markets like Brazil and the U.K. show why that success is likely to continue. If you own Netflix, your kids will brag about it someday.
eSports is the future
Daniel Miller (Electronic Arts): One stock your kids could grow up to brag about might be a company they become very familiar with in the coming decades — well, as long as your kid becomes a gamer. Electronic Arts is one of the world’s largest third-party video game publishers, and has recently expanded beyond console games to include PC and mobile games. It has well-known titles such as Madden, FIFA, and Battlefield, among others, and the company recently signed a 10-year contract with Disney to develop Star Wars games across all platforms.
The video game maker has done incredibly well for its investors: EA’s stock price is up more than 760% over the past five years. But it’s the opportunity in eSports and its massive growth that could be an X-factor for the company’s future.
Consider that eSports and other video game broadcasts already attract hundreds of millions of people across the planet, and it’s still in the early stages of what could be a lucrative long-term story. As my colleague Keith Noonan points out, some popular eSports events already amass similar viewer numbers as sporting events such as the NBA Finals — and the audience is more receptive to ads, to boot.
The truth is simple: Young Americans love to play video games on multiple platforms, and they also love to watch competitive games. However, eSports is such a young growth story, it’s not totally clear how EA could end up monetizing the competitive gaming scene.
It’s reasonable for investors to expect management to figure it out over the long term. Until that plays out, EA still dominates the sports genre of today’s gaming industry and has expanded its top line through mobile and PC gaming, in addition to its console business. If management does figure out how to capitalize on eSports, and perhaps other segments such as virtual reality, Electronic Arts could easily become a stock your kids will brag about owning in two decades.
Jeremy Bowman (Vail Resorts): A great way to get your kids interested in investing is to buy them shares of a company they’re already interested in. Vail Resorts presents an appealing investment idea for youngsters who like skiing and snowboarding.
Not only does Vail own some of the premier ski resorts in North America, including its eponymous mountain, as well as Whistler/Blackcomb and Park City, but the company has been a winner for investors, too. The stock is up more than 300% over the last five years and has a number of features that give it a competitive advantage that should ensure it continues to outperform.
Its brand name itself is an asset, as Vail has long been known as one of the best ski resorts in the country, with a glitzy image to boot, and the company’s portfolio allows it to offer access through the Epic Pass, which gives skiers and snowboarders unrestricted access to Vail’s 15 mountains in North America, as well as 30 European resorts.
With the company’s acquisition strategy, those advantages should continue to grow as it adds new properties to the Epic Pass. In addition to acquisitions, the company is also growing organically by amping up its off-season attractions, like ziplines, adventure courses, and a mountain coaster, which should also help improve the bottom line over the long haul.
The preference of millennials for spending money on experiences rather than things should give the company a tailwind, as real-world experiences become more valuable in the e-commerce era. Catch some big air with Vail Resorts. Your kids will thank you for it.
10 stocks we like better than Netflix
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Netflix wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
Consumers are increasingly shifting towards mobile platforms as new tools can help investors gain insight, hone their skills without risking a dime and ultimately trade their portfolio. Below are the top five apps that gained popularity and positive reviews among users in 2016.
Robinhood allows investors to trade stocks with no commission fee. While more experienced traders may be skeptical about the simplicity of the app and the newbies it attracts, there is no denying that it is a game changer. Launched in 2014, Robinhood’s target audience is the younger generation of traders with an average age of 26 years old, 25% of whom are first-time investors.
In 2015, Robinhood became the first financial app of any kind to win an Apple Design Award, thanks to its quick sign-up process and easy-to-use interface. The app uses geolocation to suggest relevant stocks. It provides an innovative crowd-sourced, social approach that shares insight and trends from other Robinhood users, looking to build a following. Latest updated versions of the app both for iOS and Android were uploaded in October 2016 and so far have been receiving positive reviews from the users.
In September 2016, the company announced the launch of Robinhood Gold – an advanced version of the platform with a set of premium features, such as extended trading hours, a line of credit and a faster option for making deposits and withdrawals. Access to Robinhood Gold will cost the users a flat fee of ten dollars a month.
TD Ameritrade Mobile
TD Ameritrade Mobile is offering customers several applications for monitoring the market and making trades. TD Ameritrade Mobile Trader enables the trading of equities, options, futures and forex. Traders can keep the track of the news through integrated live streams from several CNBC regional channels and a financial news service. With access to comprehensive research materials, traders of any level benefit from TD Ameritrade’s expertise. Users of this app can chat with other traders and learn about the upcoming events through the interactive market calendar.
TD Ameritrade Mobile app, the second tool offered by the mobile division of the company, is mostly focused on analysis of trends and keeping track of the trader’s positions and orders. It provides an opportunity to transfer cash and deposit checks by taking the pictures of them with the phone camera. Moreover, users can find out market information about the companies by simply scanning the bar code of the consumer products in the store. The iOS version of the application is rated higher by mobile store users than the version for Android devices.
E*Trade Mobile’s easy-to-use interface helps users locate stocks quickly through a voice search function. Similar to TD Ameritrade applications, E*Trade Mobile provides an opportunity to trade a variety of securities: stocks, ETFs, mutual funds and options. With real-time quotes and news from Morningstar, MarketWatch, Briefing.com, and various wires, along with CNBC Video on Demand, users have access to a wealth of information. Users can select information that is displayed on the customizable dashboard and have access to educational tools and comparison charts. E*trade Mobile’s application is available on mobile phones with both operating systems and can be connected to Apple Watch.
StockTouch is an informational resource that allows users to monitor the stock market in real time with an intuitive visualization of the market data. Stocks are sortable alphabetically, by size, by market capitalization, by percentage gains and by volume. Users can zoom in to obtain the detailed information about a particular stock and its historical performance, or touch anywhere on the screen to gain more insight into market trends on companies and sectors. Color-coded heat maps help users track the market’s ups and downs. The app was shut down for several months earlier this year without an official reason, but became available in the App Store again at the end of September 2016. The tool is only available for the users of Apple devices.
TradeHero is a learning app that allows investors to practice trading in a safe environment. Based on the real world data, the app is perfect for users looking to hone their skills or test new strategies without financial risk on simulated stock exchanges from around the world.
Users receive $100,000 to build their fantasy portfolios and compete against each other. The winners have a chance to be listed on the leaderboard as a hero and receive a real cash prize. Participants receive alerts about the performance of their favorite stocks and can get access to the video tutorials and the tips from experienced users.
The most recent updates for the app were launched in October 2016 with predominantly positive reviews from users. Currently the iOS and Android versions of the app slightly differ by functionality, however the company promised to add the missing features in the next versions.