Darrin Graham, a 25-year-old soldier, puts about $25 a week in his Stash account and has two Army buddies who use the app. Like Peng, Graham has a separate retirement account, through the military. He thinks of his Stash account, now with $620, as “play money,” an affordable way to learn about investing.
At first, he said, he made mistakes, picking Stash ETFs based solely on past performance, selling when they dropped, and then missing out on their recoveries. He's learning “patience,” he said. “I was just a little too quick to give up.”
Additional startup investing services are accessible to a younger audience without many resources. Robinhood offers free stock trading with no account minimums. Motif Investing, which requires a $300 investment to start, lets users buy small baskets of stocks and ETFs based on a theme, for a flat $10 commission. These apps are designed mostly for amateur traders.
“This is not a trading app,” Robinson said emphatically. The Stash app has a "Learn" section with articles on dividends, “the power of compounding,” and ways to invest in stocks and bonds. It occasionally intervenes to keep its clients from buying high and selling low. For example, on the morning in June after the U.K. unexpectedly voted to leave the European Union, stocks were plunging. Stash sent a notification to users warning of the turmoil and added:
“This is an opportunity to keep adding to your Stash at lower prices. Remember you’re in this for the long term.” Users responded by putting $325,000 into their accounts, about four times the inflow on a typical day back then.
Peng had tried other investing apps. She felt they were aimed at “someone who actually knows what they’re doing.”
The irony is that many of Stash’s users are too young to have learned what many of us learned in the dark days of 2008: When it comes to investing, hardly anyone knows what they’re doing. The best you can do is make an educated guess, save diligently, hope for the best, and maybe have a bit of fun along the way.
This article was provided by Bloomberg News.