What an excellent time to be alive! We live in a time where the stock market is right in our hands, thanks to all the digital transformation that has taken place in the last couple of years. The stock market is not as intimidating as it once was. No more suits, fees, or bureaucracy in the way of people trying to get rich!
Before we dive into all the fancy tools and apps that we have now at our disposal to invest, let’s do a quick review of how we got here. On May 17, 1792, on the corner of Wall Street and Broadway, the New York Stock Exchange was born. Back in those days, traders would have to scream and jump over each other to place trades (like animals). In 1870 a revolutionary communications system called the ticker tape changed the game and allowed traders to receive stock price information over telegraph lines. At that time, the ticker tape combined with the phone line was the perfect tool, but it was later replaced around 1966 by the first computers in Wall Street with the Quotron system and the famous quotation board. The computer era had arrived, setting up the scene to create the internet network that would bring individuals unprecedented control over their investments. E*Trade and Ameritrade heavily influenced and spearheaded this new way of trading, becoming one of the first online brokerages. This digital transformation has improved the process and positive experience for customers and industry professionals. However, the market has gone through some rough patches in the last two decades, such as in late 2000 with “The Dot.com Bust,” crash, in 2008 “Great Recession,” and in 2020 with the “COVID-19” crash (which was a smaller one compared to the other 18 ones due to the fast recovery). All that said, since the most recent recovery, there has been a positive outlook on investing.
Nowadays, thanks to companies like Robinhood, E*Trade, Merrill Edge, and TD Ameritrade, we have all the power right at our fingertips. When everything shut down in February of last year due to Covid, the platforms were already in place, allowing millions of retail investors to challenge the status quo and take advantage of this technology. So, you might wonder why many of these platforms are so attractive to the average joe. These mobile platforms are on the rise for many reasons, but I would like to highlight their simplicity, accessibility, engagement, and efficiency.
- Simple: The platforms offer many tutorials, recommendations, alerts, guidance, and videos that simplify the trading process by educating their users.
- Accessible: It used to be reserved for the elites; however, it is now accessible to anyone with a smartphone, some disposable income, and free time. They now have access to stock options, commodities, fixed income securities, mutual, ETFs, and much more, all packaged into an app 24/7.
- Engaging: Thanks to the gamification of the mobile trading apps, these platforms feel more like video games than brokerages. They keep customers engaged with colorful features. The features that significantly improve client engagement are financial goals, performance tracking, retiring planning, and customer interactions between users. Although the gamification of trading is excellent, it comes at a cost. It is imperative to understand the real-life consequences of trading.
- Efficient: Thanks to the advances in technology and accessibility, we have experienced a shift towards high-frequency trading. Due to the higher efficiency of the trading process, we are now experiencing lower trading costs which help keep the price down.
Although mobile trading now is extremely popular, ten years ago, that wasn’t the case. If you wanted to log into your brokerage account using your phone, you had to go through an internet browser, which took time, the display wasn’t mobile-friendly, and trades would not always process correctly. Thanks to some technological advancements in the past decade, like larger phone displays and higher processing power, companies saw the opportunity to invest in their mobile platforms, shaping the current market that we enjoy today.
I decided to write about this topic because I found it amusing how many people jumped on this digital transformation trend last year. Now you might be wondering if I actually used any of these apps. The answer is yes. I use the Merrill mobile platform (Merrill Edge), because of the seamless integration with my bank account at Bank of America, in addition to the app interface, speed, and reliability.
I encourage you to do your own research and find which apps are best suited for you. They are plenty of different apps out there that will help you grow your net worth. Also, before you go on with your life and forget about my blog, please don’t forget to complete the survey below. I will be publishing the results on my Twitter account for everyone interested in seeing them by the end of the week.
The opinions expressed in my blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any investment product or investment platform.