Sometimes, the stock market’s volatility is harder for novice investors to stomach. More seasoned investors, on the other hand, did much better, considering they can afford to consult a financial adviser.
Novices using affordable micro-investment apps seem to be all alone. Investment apps send messages to stick to a given approach, but financial advisers are concerned that investors are still likely to make risky decisions.
When the Dow Jones Industrial Average takes a big hit, falling over 1,000 points, in a short period of time it can be worrisome for new investors. And often, these fluctuations could forecast continued volatility in equities markets in the coming months after. Against this backdrop, investment apps like Stash and Acorns, who target novice investors, must explain the causes of the market’s weakness. This has explination has come by notifications and emails to their clients.
With Acorns, you can invest in real estate, big or small companies, or corporate or government bonds. Stash users can tailor their investments to individual interests, such as tech firms or blue-chip stocks.
Stash CEO Brandon Krieg explains to their customers that recently rising tech stocks and bond yield triggered a sell-off. He continues on to say that admittedly, an investor can’t tell the future – what Stash advises its users to do is keep calm.
Acorns CEO Noah Kerner reminds customers that every drop has ultimately ended in a rise. The only way you lose money is if the market goes down and then you pull your funds out.
During a volatile period at the beginning of 2018, a number of consumers who use apps such as Acorns and Stash started complaining about their losses to social media. This isn’t a surprise given that most of the users of these platforms are investing for the first time and favorable market conditions are the only ones they know of.