Thanks to stocks and shares apps, it has never been easier or quicker to buy shares and invest in the stock market. From starting out learning how to choose shares and trade, to running your entire portfolio from your screen, there are lots of app trading options.
When you use a stocks and shares app you are buying shares (also known as equities) in a company or a fund. This means you are buying a share in a business or a fund which you hope will grow in value so that you make a profit when you come to sell it.
Buying shares on the stock market does put your money at some risk. The value of your holding could go down (although it could also rise) and you may lose some or all of your initial stake.
For this reason, only buy shares with money that you can afford to lose. It is also a good idea to pay off debts and build up a savings pot before you venture into the stock market.
Stocks & shares apps work by enabling you to buy and sell shares via your phone. Years ago, the only way to buy shares was by telephone using a broker, or by an online platform. Now there are plenty of apps which enable you to buy on the go, using your phone.
The rise in apps means that it is now possible to run and monitor your entire portfolio from your mobile phone. The key point to understand is how much commission and fees you will pay for trading. You will need to read the terms and conditions for the trading app to see how much you will be charged.
Some apps offer commission-free trades, which may encourage you to buy and sell more frequently, but there will be some costs associated with running the account.
While it is very flexible and useful to be able to trade any time you like using your phone, it is worth remembering that if you switch in and out of stocks regularly you will potentially run up a lot of charges. You may also be more tempted to trade frequently if you are constantly receiving updates on your holdings.
There are a number of different apps and the right stocks and shares app for you depends on how you are going to trade and how much you are planning to invest.
You should also consider the following points:
Is the app simple and clear and easy to use on the go?
What spread of investments does it offer – funds, individual shares, or more complicated financial products?
Can you set up a dummy or demo account to understand how investing and trading works?
What are the costs in terms of buying and selling stocks, opening an account, or other admin fees?
How much do you need to deposit when you first open an account with the app?
Is the platform regulated by the City watchdog, the Financial Conduct Authority (FCA)?
Is your money protected by the Financial Services Compensation Scheme (FSCS)?
Costs depend on how much you use the app, and what type of investor it is designed for.
If you just want to hold a few shares and dabble in the stock market, then you could look for a low-cost app with minimal trading fees or even one that offers commission-free buying and selling.
If you have a large portfolio you need to be clear about how the charges are levied – does the app provider take a percentage of the money you have invested as commission?
Some providers charge a flat fee or a maximum fee, while others charge per transaction.
There are also apps that provide “commission-free” trading but be sure to check the small print to establish whether they make their money in other ways.
These apps are generally very user-friendly and simple to use. While that is a great benefit, it can also encourage investors to buy and sell more frequently. There is also some research that suggests investors who buy shares via apps are more likely to go for riskier equities. So think carefully about how you plan to use the app and make sure you are using it wisely.
You could start with opening a demo account to see how trading works and what is involved. While you are trading in and out of shares without parting with any real money you can use the site’s education information and videos to learn more about how to pick stocks and how to create a balanced portfolio of growth shares.
eToro is a popular platform that is supported by social media and aims to educate users on how to trade stocks and learn more about investment. You can also trade cryptocurrencies, traditional currencies, exchange-traded funds (ETFs) and bonds.
eToro’s big selling point is that you can trade shares at zero commission. However, there are other charges: market spreads and currency conversion fees need to be factored in.
IG enables you to create a demo account – which is great for beginner investors, or those wanting to experience trading via an app for the first time.
The app enables you to buy and sell shares, and you can use it to invest in an Individual Savings Account (ISA) as a tax-efficient way of saving for your future. There is also the option to start a pension within the app.
It also offers tutorials and information on learning to trade which is useful for first-time investors. You can also choose IG’s own Smart Portfolio of selected shares.
Hargreaves Lansdown is a well known online investment site and offers resources for first-time investors as well as the option to invest in a ready-made portfolio, create your own basket of shares with suggestions from HL, or select all your own funds for a bespoke portfolio of investments.
You can invest via a SIPP or ISA and there are plenty of guides to help you understand the process of building your own collection of stocks and shares.
AJ Bell offers low-cost ISAs and pensions for new and experienced investors alike. It offers a SIPP, ISA, Junior ISA, Lifetime ISA, Dealing account and Cash savings hub to serve a variety of investment needs.
There are free guides to investing, a range of 2,000 funds to choose from and ready-made portfolios for those that do not want to get involved in stock picking themselves.
The Fidelity app enables you to create a watchlist, and buy and sell on the go. There are ready-made portfolios for first-time investors, including the Navigator which helps you choose the right fund for your lifestyle and approach to risk and the Easy Invest low-cost fund which holds the shares of some of the world’s biggest companies.
Freetrade enables investors to choose from more than 6,000 stocks commission-free. The Freetrade Stocks & Shares ISA costs £3 per month but the app does not charge a percentage account fee.
The Freetrade SIPP costs £9.99 per month, or £7 per month if you’re a Freetrade Plus member.