Share trading is experiencing a boom, and younger generations are driving it. According to a study, three quarters of people under 40 are considering investing in the near future, and stock markets have been buffered from the worst effects of the pandemic by a new generation of retail traders.
There are a few reasons for this surge in popularity in trading. Partly, it’s down to low interest rates, which makes saving less attractive. Then there’s the Covid pandemic itself, which has given people more time to research markets and gain an understanding of the trading stories that are now part of everyday news. But most of all, it’s down to just how easy it is these days to open an account on a trading platform. A new generation of apps has opened up the once bewildering world of stocks and shares to people who, just a decade ago, may never have considered investing as an option.
Investing via app
What a difference that decade has made. It isn’t so long ago that retail trading was considered the preserve of the well off and well connected. Stock markets were seen as too complex for most people, and the gatekeepers of Wall Street or the City of London - long established investment banks and brokerage firms that make trades on behalf of clients - charged hefty fees for access to their experience and expertise.
Except, as it turns out, their expertise wasn’t quite so considerable after all. When markets crashed in 2008, nobody saw it coming. Investment firms and their clients lost fortunes.
Twelve years on and anybody can invest in stocks and shares from an easy-to-use smartphone app. Fees are low, and the user experience is exactly what people have come to expect from digital technology. We’ve all got used to ordering taxis, paying bills and booking trips with a few taps on a smartphone screen. Investing in shares in the same way is simply a logical next step.
Something else we’ve all got used to in the last decade or so is social media. And again, our use of Facebook, Twitter, LinkedIn etc… has evolved over time. We don’t just interact with friends on social media anymore, we join groups, follow people who have interesting opinions or who communicate specialist knowledge, and use these platforms to increase our own understanding in areas that appeal to us.
With all that in mind, it’s no surprise that people are now attracted to a new wave of investment platforms that combine the simplicity and convenience of a smartphone app with the communal experience of social media.
These platforms are empowering, allowing investors to develop their own styles and define their own attitudes to risk. They incorporate self-service, letting users make their own decisions and act on them. At the same time, they let everyone benefit from the shared experience of the investment community.
Now almost anybody can trade
How does all that work in practice? Take eToro, the world’s most popular social investing platform. eToro comes with all the ease-of-use and cost advantages in an investing app, sweeping away traditional barriers to entry.
You can set up an eToro account in minutes with a deposit of just $200 (or the equivalent in other currencies). You can trade in a range of products, including commodities, currencies and, of course, invest in stocks – which are 100% commission free. Everything is managed through the simple to use app, with an easy process for withdrawing cash.
But what really separates eToro from the rest is its complementary function as a social platform for investors. When you sign up with eToro, you’re effectively tapping into the combined knowledge of millions of users from across the globe. The platform refines that extensive knowledge into a range of practical investment tools.
For example, if you’re new to investing you can simply copy the example of other users who may be more experienced and successful. The CopyTrader tool helps you locate traders who have the same investment interests or attitudes to risk as you, and lets you match their trades.
Minimize your risk
It’s entirely up to you how much money you risk in this way, and how long you follow other traders for. And it’s not just a good way of mimicking successful investors, it’s also a great way of developing your own style. Watching good investors make smart decisions is a crash course in stock market investing.
The social element doesn’t end there. eToro users get a personalised news feed, allowing you to follow the markets and users you like and interact with other members of the community. You can post updates of your own and comment on the updates of others. It’s a great way of learning more about investing, whilst also bringing fun.
In other words, it’s exactly what millennials want from a digital application. It lets them participate, learn and improve, and gives them complete control of the process. And it puts them at the heart of a community of people with similar interests. By offering a new way of investing moulded to the priorities of millennials and generation z, eToro is making investing an activity for the many, rather than the few.
Find out how you can start investing without any hassle. Download the eToro app for free and you can be investing in leading markets, discuss trading strategies and copy top-performing traders today. Find out more here…
Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
CopyTrading is a portfolio management product, provided by eToro Europe Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.