Investors today have more options than ever before, not just when it comes to potential assets, but also in how they invest. This isn’t necessarily relevant to long-term investors who are used to trading in traditional markets. Many who are just starting out, however, and particularly young people who may be looking for interesting alternatives from the outset, might ultimately lean toward something newer or more accessible. Sometimes these are nice strategic options, and sometimes they may be better left alone. At any rate, in this piece we’ll present brief assessments of some of the methods and opportunities we’re talking about.
Stock Trading Apps
It was only a matter of time before stock trading via app became a popular alternative, though we might not have predicted how many brand new services would be offered. Among the best trading apps available, there are mobile versions of trusted brokerage firms like TD Ameritrade, but also relatively new companies like Robinhood and Acorn that are specifically designed to make the process cheaper and easier, for beginners and likely younger people to take advantage of. All in all, assessing this category depends somewhat on the specific app at hand. By and large though, these apps are making the markets more accessible, which is a good thing. There’s some risk of people assuming things will be easier than they actually are when starting off on these apps, so it’s important for users to remain cautious and studious in their approaches. However, these apps can certainly be useful.
The cryptocurrency trade is another fairly new phenomenon, and it too operates largely through apps (though there are desktop platforms and some other methods for buying and selling cryptos as well). The actual investment concept here is different, however, and more akin to forex trading, or buying precious metals and commodities. Basically, one hopes to buy and hold a given cryptocurrency, and eventually sell it for more than it was worth upon purchase. The fact that this activity is so accessible is not a bad thing for beginning investors, as a little bit of commodity trading can be a nice way to diversify one’s investment strategies. Specifically though, cryptos are so volatile that there’s also something of a “buyer beware” mentality surrounding them of late.
Betting, as most understand to some degree, is not exactly the same thing as investment. Generally speaking, there’s more chance involved, and betting is viewed more as a risk than a strategic financial maneuver. However, because secure, trusted, and regulated sites are becoming more prevalent, and access to them is getting easier (in some cases because of loosening gambling laws, but also because of improved apps), there are certainly some young people and beginning investors making a habit out of betting in search of financial gain. Generally speaking, this is an ill-advised activity if one goes about it as a means of investment. As a fun activity with the possibility of winnings, it’s up to each individual to determine whether or not betting is worth it. Just be clear about the distinction between activity and investment.
Venture capital can be defined in a few different ways, but it is essentially the purchase of a small stake in a budding company, in the hopes that that stake will be worth more as the company grows. This is a form of investment that some television shows like Shark Tank have helped to popularize, and accordingly, relative beginners are taking their shot at it. There are now services like Newchip that are basically designed to allow people to “invest in what they believe in” even if they don’t have the millions of dollars to start with that most professional venture capitalists have. Like any other form of investment, this carries significant risk, and a patient, strategic, and realistic approach is needed. Most companies seeking investment will not ultimately be worth much. That said, with the right approach, it’s a reasonable way to diversify one’s investments.