What is the best Micro Investing App?
In this article, I will outline the many different options available to investors that are just starting out on their investing journey. Firstly, getting to know all the different financial products and services can be overwhelming. Therefore, I have reviewed some of the most popular micro-investing apps to get started. Next, I will compare the pros and cons of each app. However, micro-investing is only one option with online brokers such as Pearler or Stake disrupting the online broker market. Therefore, I have summarised below the three main micro-investing apps including CommSec Pocket, Raiz Investing and Spaceship:
1. Commsec Pocket
Firstly, the CommSec Pocket investing app was created for small value investors who want flexibility in the amount they can invest. Commsec Pocket allows investors to start small and allows you to build a portfolio over time. Furthermore, there are 7 different themes that investors can choose from. These themes allow them to invest in different sectors of the market such as tech or sustainability. However, to invest you will be buying units in Exchange Traded Funds. This will enable you to diversify your investment across multiple securities within the chosen fund. I have included a list of the pros and cons of investing with CommSec Pocket below:
Pros
- Aimed for those new to the stock market
- Free to open account without monthly fees
- Trade in 7 different ETF’s
- Owned by a CommBank that is highly regulated
- Client Password Protection
- Two factor SMS authentication
- Fraud monitoring software
Cons
- Minimum investment amount of $50
- $2 fee for trades up to and including $1,000
- 0.20% fee on the value of trades above $1,000
- Cannot access support 24/7, limited hours only
- More suitable to experienced investors
If you want to take the next step, you can simply download the Commsec Pocket app and create an account. To learn more, I have outlined a great article on investing in the share market to start your investing journey.
2. Raiz Investing
In this paragraph, I will discuss the features of Raiz formally known as Acorns. The investing app is popular among younger investors due to the low minimum investment required. Secondly, the option to invest cents from payments makes investing easy. Furthermore, contributing to your change limits the large amounts withdrawn from the bank account all at once. By automating investing into a diversified portfolio, you are able to take a more passive approach. I have outlined the pros and cons of Raiz below:
Pros
- $0 minimum investment
- 6 diversified portfolios to choose from
- Does not cost to open a Riaz account
- Round up amounts from payments that can now be invested directly
Cons
- Not backed by a large bank
- High fees for accounts that have low balances
- Fees 0.275% per year for account balances over $15,000
- Flat low fee of $3.50 per month for balances under $15,000
- Cannot invest directly in individual stocks
- Not available for business owners
An advantage of investing with Raiz is that you can select your portfolio based on your risk profile. There is the option to choose a safer portfolio or select a more aggressive portfolio. Moreover, with no fees on deposits and withdrawals, you can have the flexibility to invest your way. However, make sure you do your own research first before making any decisions. You can read a copy of the PDS here for further information.
3. Spaceship Voyager
Spaceship Voyager was created only a few years ago in 2017. The app was formed to make it easy for new investors to enter the market. Moreover, the online app offers options to invest in some of the largest companies around the globe. This has been proved successful with 175,000 customers. Furthermore, investors are engaged with the Spaceship community on Facebook being one of the more popular micro-investing apps. I have summarised the pros and cons of the app below:
Pros
- Simple to use
- Affordable entry point to invest
- No minimum investment
- Instant diversification
- Long term investing approach
- No additional fees for mulitple portfolios
Cons
- Simple $2.50 fee per month with a portfolio balance of over $100
- High risk profile for investments
The Spaceship Universal Portfolio focuses on leading-edge companies such as Spotify, Telsa and Apple. The Spaceship Earth Portfolio targets more of a positive impact on people/planet with companies such as Starbucks and Shopify. Lastly, you can choose to invest in The Spaceship Origin Portfolio that holds some of the largest companies in the world such as Berkshire Hathaway and Amazon. Whatever portfolio you choose, there is further detail into different investment portfolios within the product disclosure statements for your reference.
In summary, with three diversified portfolio options to choose from investors can select the portfolio that aligns with their goals. Furthermore, investing a little regularly can be a great method to grow the portfolio over time. There is further detail into different investment portfolios within the product disclosure statements for your reference. If you would like to track the tax implications of your portfolio have a read of the Sharesight review to see how easy it can be.
Summary
There are a number of ways that students and first-time investors can invest their money. I prefer to take advantage of dollar-cost averaging. More importantly, by investing a low amount regularly, I continue to invest over time. Furthermore, the low cost allows more investors to access markets. In addition, beginner investors can grow their wealth and become more informed investors. I personally find that time in the market a more stable approach for the long term. Moreover, there is a greater level of risk by timing the market. If you need more time to get your finances in order, read the following article to learn how to budget and manage your money better.
