2021 started with amateur investors showing us the power of trading apps: a group of young users organizing themselves internet forums like Reddit and drove big hedge funds who had betted on the decline of stocks such as GameStop to a short squeeze that resulted in million dollar losses.
Even though these organized users made big profits before the price fell back down from $482 to no more than $100, many speculators decided to get in on this new use of trading apps only to find that prices did not sprang up that easily. This led to many users losing substantial amounts of money due to a use of these apps without the proper financial education. So, do free trading apps truly make the financial world accessible to everyone?
These new trading apps are different from established platforms in that they offer feeless services. Even though this is an enticing feature, it implies that users make trading decisions on their own. No longer do they resort to broker dealers who took a substantial cut, but who also provided financial advice on the best investment opportunities for their clients.
Furthermore, the access to the markets through these apps is much broader than before. Until recently, small investors focused only on bonds, equities and funds, these being the most accessible vehicles for them. Now, apps such as RobinHood go as far as offering cryptocurrencies in their platforms, jazzy assets that tend to be extremely volatile and are likely to be purchased by inexperienced traders who don’t usually have a clear understanding of how they work and the substantial risk they pose when investing.
Some apps like eToro even go as far as offering users to copy the transaction of important trading figures. This action is extremely discouraged by financial professionals, and frankly, by anyone who knows the slightest bit about trading. This service is supposed to help users avoid the high fees charged by wealth management services. However, the fact of the matter is that not every portfolio can benefit from buying or selling the same asset at any given time and/or price.
When trading, financial education is always essential. It separates trading from a simple gamble based on a gut feeling. Trading must be the result of thorough market analysis, comprehension of the asset, when to buy it and when to sell it. A deep comprehension of the system is the only way to consistently see a return on your investment and make sure you are not throwing your money away on an asset that may not be the best fit for you.
Capitalista, our global trading platform, will compliment trading services with wealth management assistance for those in need of help to understand how the financial world works and how to make a profit in the Capitalista secondary market. We believe financial education is of the utmost importance when trying to make trading truly accessible for everyone, as true knowledge and comprehension of the financial world is really what is lacking today. If you would like to be a part of Konzortia Capital before the opportunity to get in is no longer available, you can visit www.konzortiacapital.com, leave your contact information, and a member from our investor relations team will contact you shortly