Ever thought of beginning your stocks investment journey but have no clue where to start? The idea of getting started on this path can seem daunting, especially if you lack the finances and know-how.
But micro-investing apps provide a simple solution. With them, you can build up your exchange-traded funds portfolio by saving up small amounts at a time. These small amounts compound over time, allowing you to earn a return from the growth of the investment. The longer the funds remain invested, the more time it has to compound and grow.
But with this convenience comes the question: Are micro-investing apps a smart choice? Can they help us attain our long-term financial objectives?
How Exactly Do Micro-Investing Apps Function?
Micro-investing apps are smartphone-based programs that help users dip their toes in the world of investments without a large upfront investment. Not many people can afford to purchase one share of a reputable company for £500.
Instead, these apps enable users to round up as little as £1 from their daily/weekly purchases and tuck it away into an investment. Usually, such investments involve exchange-traded funds, fractional shares of stocks, real-estate investment trusts, and the like.
Not much is necessary to get started in micro-investing. Oftentimes, you will only need to pay for the user fee and trading costs, which are pretty minimal. Nonetheless, the best part is that anyone can get started.
Some apps make investing easier by allowing you to link your debit card, automatically rounding up and investing your spare change. That way, as you buy your favourite Starbucks coffee, a new Next or Clarks outfit, or even play at top UK casino sites, such apps round-up as little as one pound and invest it in stocks.
Apart from round-up saving, some apps also work with pound-cost averaging. In them, users set aside a consistent amount every week or month for investing. It is similar to how you would set aside a specific bankroll amount when playing at any online casino. A common practice is to specify the amount you’ll spend each time you indulge in top UK online slots. Once that amount ends, you log out of your game account until the next time.
In the same way, you’ll only need to invest a specific amount consistently. In turn, these micro-investing apps will buy more low-priced shares over time. That way, you won’t have to worry about market-timing investing strategies, which are common in the stock market.
How to Find the Right Micro-Investing App
At the heart of this simple investment strategy, choosing the right micro-investing app is hinged on a few critical aspects.
First, consider the commissions and fees involved. There are loads of free or low management-cost micro-investing apps available on the investment scene. Also, review the account minimums, trading commissions, and other related costs. Pick one that best aligns with your needs while maintaining low operation costs.
Second, delve into their investment choices. Each app features a unique list of asset selections. Check the types of stocks, real estate investment trusts (REITs), ETFs, mutual funds, cryptocurrencies, and other investments they are involved with. Many times, apps that offer fractional shares and access to global markets are a favourite for most micro-investing app investors.
Third, gauge the application’s usability. Easy controls, painless order execution, and a stylish yet modern interface are crucial. Research whether the app offers chatbots, investing guides, educational videos, and other helpful content to make your micro-investing journey worth it.
Fourth, assess their security features. These apps usually require your information when setting up an account, with some even letting you link your debit cards. Ensuring the app has adequate security measures, such as encryption, authentication standards, and transparent policies, provides a solid foundation for investing.
Lastly, review the app’s reputation. For new investors keen on making the right investment decisions, choosing an application with positive expert reviews and user ratings indicates credibility.
Choosing the right micro-investing app is the lifeboat for beginners seeking to venture into the investment space. Remember, everyone can use these applications and make their money work for them. You just need to find the most suited one.