Why the growing interest...

[TheHaitian]

In buying individual stocks or investing among millennials? Are we stepping away from just buying index funds?

Seems I missed the memo, but everyone in my age group seems to be either on acorn or robin hood or whatever app they may have created since I started this thread that allows you to buy individual stocks with as low as $5.

Is that the new “IT” thing now? Everyone feels like they are a pro and can make sound investments with this app or is that just another form of gambling with your lunch money?

Just got an invite (third one) for robin hood from a friend. Interesting concept but I tell myself why buy individual stocks since I probably already own it in my SP500 fund.... and some closer look feels like for folks that want the “day traders” rush without risking day traders kinda money.

Am I missing something? Am I suddenly old and missing out on the new hype?

[justme]

It's not because of stocks, it's getting them onto it without having to save up money to buy into mutual funds or ETFs. A lot of those accounts require $1000 or more to start it. Whereas these apps let you put in the $0.53 round up from your daily coffee.

It's convenience of method not specific choice in buying stocks.

[CCL]

And don't they also get a free stock share if you sign up via their referral? That would be an incentive for them.

Fidelity has zero fund minimums so you could buy any amount. You don't have to save up a couple thousand to buy in any more.

[alabamagal]

I don’t think it is new. There have always been people who bought individual stocks that they thought would do good. But we used to have to go to a broker, write them a check, then look at stock quotes in the paper. Now you can do it instantly and share on social media.

[Deleted]

Dec 20, 2019 6:42:40 GMT -5 alabamagal said:

I don’t think it is new. There have always been people who bought individual stocks that they thought would do good. But we used to have to go to a broker, write them a check, then look at stock quotes in the paper. Now you can do it instantly and share on social media.

I also don't think it is new.  It was the premise behind Sharebuilder, which allowed you to contribute low amounts and buy fractional shares, etc.  I did it . . .  not very successfully, I may add.  But it wasn't the day trader rush that was being touted.  It was a buy-and-hold philosophy bolstered by DRIPs (dividend reinvestment programs).

[Deleted]

DRIPs were really big when I was in my 20's (25-30 years ago), so I don't think it's all that new either.   It was a cheap way to invest in stocks as you could just have small amounts deducted from your checking every month going to Exxon or wherever.  I dabbled in it for awhile.  Then PCs became a home item and E-Trade and Sharebuilder were all the rage.

[hoops902]

I think you're just YM brainwashed into thinking what happens here is "normal".  People buying up individual stock isn't new...it's been around FOREVER!  The idea that you can't beat the market and should just buy an index fund, sit on it, and leave it alone...that's the new thing.  

The new piece to these sites is that you can invest with practically nothing...I think some of them even round off your purchases to the nearest dollar higher and automatically invest the change.  The execution is new.  The investing strategy of buying up individual stocks is old.

[Bluerobin]

Buying individual stocks has always been more profitable for me.  The funds just don't appreciate that much.

[giramomma]

That low threshold is appealing.

DS got a job after thanksgiving. I want to open up a Roth IRA for him, but he'll only be making $500 or so this year.

I'm having a hard time finding somewhere to open up a Roth IRA for such little money. I know we can open up a CD at a bank, and then roll it into something else, but I'm too lazy.

[giramomma]

Dec 20, 2019 0:07:14 GMT -5 CCL said:

And don't they also get a free stock share if you sign up via their referral? That would be an incentive for them.

Fidelity has zero fund minimums so you could buy any amount. You don't have to save up a couple thousand to buy in any more.

Thank you for this!!

I just found Fidelity has an IRA program for kids under 18 with no minimums!

[MN-Investor]

Buying low expense ratio index funds is investing.

Only owning a few individual stocks is gambling.

My husband and I did exceptionally well by investing in the stocks of the two companies we worked for. I still hold quite a few shares of my previous employer - bought at $2/shares, selling now for $79/share. HOWEVER, we always made sure we had a healthy investment in index funds, and if either of our company stocks went to $0, we would still be fine.

[Tiny]

I don't think its appeal is so much the "stock" buying - it's the "can do it from my phone anytime I want" part.  And maybe the "one stop shopping" aspect as well.   I would imagine they want to be the Amazon of stock purchases/trades.      (I wonder how all that buying/selling plays out at tax time).

Back in the day I used Snail Mail to get a Fidelity Money Market account (so I could mail $50 a month to them, with the goal of building up the money to buy a fund AND then to build up the minimum purchase amount). It was slow took years. (well a bit less cause I added in windfalls (a bonus? a raise?). Did the same thing with some individual DRiP stocks - started an account and then snail mailed money to buy more shares. Eventually, I set up electronic transfers either right from my paycheck OR from my checking accounts. As time went on, the amounts I'm saving got big. And there was more of an on-line presence for Fidelity/DRiP management companies/banks... so I set up automatic purchases.

At this point in my life I don't want to have to keep picking and choosing what I'm investing in by the dollar amount I have available.   I'm not sure I could trade/move money at Fidelity from my phone... and I don't really want to.  I'm sure I can't do anything with my DRP stocks from my phone.     

I think there's some novelty (and instant gratification) in being able to purchase a $50 portion of some stock anytime you have $50 (or $25 or $10 or $5).

I also think there's the Fantasy about buying shares with $10 and then having the stock take off and wham bam you are a millionaire.

[TheHaitian]

Dec 20, 2019 16:19:05 GMT -5 Tiny said:

I also think there's the Fantasy about buying shares with $10 and then having the stock take off and wham bam you are a millionaire.

I agree

[Tiny]

Was thinking about this last night... with all the "buying stuff while drunk/high" that's made so much easier with one's cell phone... I've got to wonder what the toll will be with drunk/high stock purchases.

[sesfw]

I remember 'penny stocks' from the 1960s and you could buy stock for under $1.  

I agree with mninvestor ......... if you want to gamble on a couple of companies, go ahead IF you have a well funded emergency account.

For long term ....... stick with a good mutual fund.

[haapai]

Dec 21, 2019 10:37:34 GMT -5 Tiny said:

Was thinking about this last night... with all the "buying stuff while drunk/high" that's made so much easier with one's cell phone... I've got to wonder what the toll will be with drunk/high stock purchases.

It might not be as high as the toll of shopping while drunk or high, or of buying lottery tickets every time work pisses you off.  

Given how much I've been hating my job recently, and how many times I have been tempted to buy lottery tickets right after leaving, I'm interested. 

[Deleted]

Dec 20, 2019 16:05:45 GMT -5 giramomma said:

Dec 20, 2019 0:07:14 GMT -5 CCL said:

And don't they also get a free stock share if you sign up via their referral? That would be an incentive for them.

Fidelity has zero fund minimums so you could buy any amount. You don't have to save up a couple thousand to buy in any more.

Thank you for this!!

I just found Fidelity has an IRA program for kids under 18 with no minimums!

Charles Schwab has no minimums either...on any IRA, custodial or not.

[justme]

Dec 20, 2019 16:05:45 GMT -5 giramomma said:

Dec 20, 2019 0:07:14 GMT -5 CCL said:

And don't they also get a free stock share if you sign up via their referral? That would be an incentive for them.

Fidelity has zero fund minimums so you could buy any amount. You don't have to save up a couple thousand to buy in any more.

Thank you for this!!

I just found Fidelity has an IRA program for kids under 18 with no minimums!

Good! I was going to mention Ally has IRA savings accounts with zero minimums. I used it years ago when I couldn't find a place that had low enough minimums.

[bobosensei]

Dec 21, 2019 12:31:34 GMT -5 haapai said:

Dec 21, 2019 10:37:34 GMT -5 Tiny said:

Was thinking about this last night... with all the "buying stuff while drunk/high" that's made so much easier with one's cell phone... I've got to wonder what the toll will be with drunk/high stock purchases.

It might not be as high as the toll of shopping while drunk or high, or of buying lottery tickets every time work pisses you off.  

Given how much I've been hating my job recently, and how many times I have been tempted to buy lottery tickets right after leaving, I'm interested. 

One of my old co-workers and I used to do this all the time.  We'd get so mad at everyone and walk to the gas station by our building and buy scratch offs.

Also a good reminder that I wanted to get some lotto tickets for Christmas gifts

[haapai]

Dec 22, 2019 13:58:23 GMT -5 bobosensei said:

Dec 21, 2019 12:31:34 GMT -5 haapai said:

It might not be as high as the toll of shopping while drunk or high, or of buying lottery tickets every time work pisses you off.  

Given how much I've been hating my job recently, and how many times I have been tempted to buy lottery tickets right after leaving, I'm interested. 

One of my old co-workers and I used to do this all the time.  We'd get so mad at everyone and walk to the gas station by our building and buy scratch offs.

Also a good reminder that I wanted to get some lotto tickets for Christmas gifts

Hmmm.  I believe that I have been misconstrued.  Let me repeat myself at the risk of being crude.  There has got to be a better way to leave your hateful job than by buying lottery tickets. 

It ain't much of an endorsement of the platform.  I'm just pointing out that it might be less harmful in order to disguise my job-whine. 

I really need to get a smart phone, figure out how to use it, and find an app that allows me to transfer a buck or ten into any kind of investment when work pisses me off.  

I think this could be termed "harnessing your double-latte factor".  And the app or the business doesn't have to be particularly profitable for the user.  It just has to be less wasteful than lottery tickets or six-packs. 

[Tiny]

arrghhh  Now I've got  "50 ways to leave your lover stuck in my head"       Paul Simon is the worst artist for me... he songs are nothing but ear worm material.... arrrggghhh... 

Off to listen to something to get the sounds out of my head... 
 

[Deleted]

I'm happy with whatever brings people into investing although I wonder how the vendors make any money with so many small transactions.  My Dad started in his 30s but that was before the Internet, discount brokerages, etc. and it was a lot harder to do research.  I still remember his little books of stock charts.  It was probably also intimidating if you came from a working-class background (he did) to go into a brokerage firm, which typically had old guys smoking cigars watching the stock trades and writing them down at intervals.  It's important to start early so when you make mistakes you have time to recover from them and you don't make mistakes that lose giant amounts of money later in your life.

So, if this method works for people who otherwise wouldn't save or would put it into CDs or lottery tickets, it's a good idea.